Real estate CEO warns of a growing ‘exodus’ from California — says residents are ‘fleeing’ as quality of life declines, business gets more difficult. So where are they escaping to?

Peebles didn’t mince words, arguing that the state’s policies “were hurting businesses.”

He also pointed to the growing wave of people leaving California.

“People are fleeing, they have given up, and they're going to other places,” he said. “We're going to see more of an exodus out of California, because the quality of life has diminished as well.”

The California exodus by the numbers

Talk of a California exodus gained momentum during the pandemic, and although the pace has slowed, the outflow of residents hasn’t stopped.

According to the latest U.S. Census Bureau data on state-to-state migration flows, 690,127 people left California for another state in 2023 — following an even larger outflow of 817,669 residents the year before.

Where did they go?

Texas topped the list. In 2023, 93,970 Californians relocated to the Lone Star State. In fact, Texas has consistently been the most popular destination for those leaving California:

• 107,546 Californians moved there in 2021
• 102,442 more followed in 2022

Arizona and Florida were also major draws, attracting 54,222 and 39,052 former Californians, respectively, during the most recent reporting period.

Rising costs of living — and how to hedge against them

There are many theories about why so many Californians are leaving. High taxes are often cited — for example, neither Texas nor Florida imposes a state income tax. But perhaps just as important is the sky-high cost of living.

Housing costs alone are enough to make headlines. According to data from real estate brokerage Redfin, the median home price in California currently stands at $859,700 — nearly twice the national median of $440,892.

A recent Bankrate study found that a household in California needs an annual income of $213,447 to afford a typical home in the state.

Yet real estate remains a popular investment choice for those looking to hedge against rising living costs. When inflation goes up, property values often climb as well, reflecting the higher costs of materials, labor and land.

At the same time, rental income tends to rise, providing landlords with a revenue stream that adjusts with inflation.

Over the past five years, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has surged more than 50%.

These days, you don’t need to buy an entire property outright to benefit from real estate investing. Crowdfunding platforms like Arrived have made it easier than ever for everyday investors to gain exposure to this income-generating asset class.

Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.

The process is simple: Browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving positive rental income distributions from your investment.

For accredited investors, Homeshares gives access to the $35 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.

With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.

With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.

Another option is First National Realty Partners (FNRP), which allows accredited investors to diversify their portfolio through grocery-anchored commercial properties without taking on the responsibilities of being a landlord.