Ironically, California has one of the most expensive housing markets in the U.S. despite its year-round pleasant weather and thriving business. Residents are leaving at a startling rate due to skyrocketing real estate prices and rising living expenses.
Arizona is rapidly overtaking Texas as the most popular place for Californians to relocate. In actuality, almost 630,000 Californians, or the population of Tucson, have relocated to Arizona in the last ten years. The magnitude of the California exodus is further demonstrated by the fact that Washington, Florida, and Nevada round out the top five destinations for Californians departing the state.
Arizona appeals to a wide range of people. Californians seeking a more laid-back lifestyle find it to be a desirable alternative due to its lower cost of living, closeness, and thriving job market. Arizona’s reasonably priced property market is one of its greatest advantages. Homes in Arizona are far less expensive than those in the Golden State, even if they are still not inexpensive by any means. People in Arizona have a far higher chance of becoming homeowners because, on average, homes there cost less than half as much as those in California ($321K vs. $659K).
Rent is also on the decline, with apartments in Arizona being 30% less expensive than those in California. Despite California’s 27% higher average income, the affordability difference between the two states is hardly affected.
Another important factor in the choice to leave California is taxes. The state has the highest individual income tax rate in the country at 13.3%, and its corporate tax rate is not far behind at 8.8%. Arizona, on the other hand, is a much more alluring choice for people or businesses looking for financial relief because it has a corporation tax rate of 4.9% and an individual income tax rate of only 2.5%, which is a sixth of California’s.
Who is moving from California to Arizona?
Why would anyone choose Arizona’s gentler temperature over California’s heat? Arizona is attracting a lot of young professionals because of its robust economy, particularly in the IT and healthcare sectors, and its high standard of living. Millennials account for 26% of new arrivals, or roughly 17,500 persons, according to the most recent county-to-county migration data from the U.S. Census’ 5-year American Community Survey (2018–2022). Gen Z comes in second at 20%, or about 13,500 new residents a year. An additional 18%, or about 12,000 movers annually, are contributed by many baby boomers looking for reasonably priced retirement options.
Although only 9% of those migrating say they work remotely, 25% have a bachelor’s degree. Californians who relocate to Arizona typically earn about $51,000 year, which is more than the $48,600 per capita income of the state as a whole. Furthermore, within their first year in Arizona, roughly 46% of these newcomers are able to buy a home.
The most popular starting points for Californians traveling to Arizona are Los Angeles, San Diego, and Orange counties. However, which routes are the busiest and where in Arizona are they settling? The most common paths for relocating from California to Arizona have been highlighted by our analysis of IPUMS and U.S. Census data. In order to assess how these moves measure up and determine which routes give the best chance for movers to make money, we have also examined demographic and real estate trends, such as income data, self-storage rates, apartment rents, and property prices.
Phoenix Upends the Trend
In only a single year, nearly 34,000 Californians move to Maricopa County. With nearly 34,000 new residents in 2022, Maricopa County, with its thriving Phoenix metro region, is the go-to place for Californians fleeing Los Angeles’ infamously pricey property market.
Because of its excellent colleges and robust aerospace sector, Phoenix has long been a favorite among tech businesses. Naturally, there is a thriving sector of both Californian transplants and domestic tech enterprises. Businesses such as Unical Aviation, Sendoso, and HomeLight have relocated their corporate headquarters from California to Maricopa County in recent years.
Large companies, including Apple, have made the Phoenix metro area into a veritable sanctuary for data centers. Nearly 60 data centers have been established in the metro region as a result of the dry climate with low humidity, low risk of natural disasters like hurricanes or tornadoes, abundant solar energy, and solid infrastructure.
The local tech industry is being further stimulated by this trend, which is also helping to create thousands of desirable employment. It’s simple to understand why former Californians are moving here when you combine these incentives with the 300 sunny days of the year and the spooky splendor of the Sonoran Desert. Maricopa County is really the starting point for five of the most well-traveled relocation routes from California to Arizona.
From the Valley to the Valley of the Sun
The Valley of the Sun became the most popular relocating route from LA County to Maricopa County when over 8,700 former Los Angelenos traded the Pacific shoreline for it. Millennials make up a sizable portion of such movers—35%. In terms of housing prices in particular, the exchange is paying off. Since the average cost of a home in Maricopa County is around half that of a home in Los Angeles County, moving here may result in a $360,000 discount on a home purchase. Additionally, 43% of former Los Angelenos who move to Arizona in their first year of residency are taking advantage of it.
When more than 8,700 former Los Angelenos traded the Pacific shoreline for the Valley of the Sun, it became the most popular route for people moving from LA County to Maricopa County. A significant proportion of these movers—35%—are millennials. The trade is paying off, especially when it comes to housing prices. Moving to Maricopa County might save you $360,000 on a home purchase because the average cost of a home here is around half that of a home in Los Angeles County. Furthermore, in their first year of residency, 43% of former Los Angelenos who relocate to Arizona are abusing it.
- San Diego County to Maricopa County
The second-busiest moving route from California to Arizona starts in San Diego County and ends in Maricopa County, with nearly 5,200 people choosing it in 2022 alone. Interestingly, this is one of the “youngest” moving routes between the two states, with the average age of movers being around 30. This is significantly lower than the average age of all California-to-Arizona movers, which is 36.5.
Naturally, these young people are interested in climbing the property ladder, a far easier mission in the Phoenix metro area, where the price of homes, at around $371K, is about half of the average price in San Diego County. Thus, about 54% of newcomers manage to purchase a home within their first year in Arizona.
- Orange County to Maricopa County
Over 4,000 people relocated from Orange County, anchored by Santa Ana, to Maricopa County, in 2022, making it the third-most-popular route between the two states. Over half of those who trade sandy Pacific beaches for the sandy Sonoran Desert manage to purchase a home within their first year in Arizona, and at a massive 57% discount. Average home prices in Maricopa County are almost half a million less than in Orange County, where they hover around a taxing $893K.
- Riverside County to Maricopa County
About 3,300 Americans took the approximately 360-mile moving route leading from Riverside County to Maricopa County, and about a quarter of them are millennials. Home prices differences between the two locations are not quite as striking as with the other routes, but they still amount to over $91K in Maricopa’s favor. About 31% of the former residents of Riverside County managed to buy a home in Maricopa County during their first year here.
- San Bernardino County to Maricopa County
San Bernardino County is the fifth-most-likely origin place for Californians relocating to Maricopa County. About 2,650 made the move in one year alone, with 29% of them being Millennials. Homes are less expensive by over $66K at the destination, and the job opportunities are greater, with unemployment in Maricopa County almost two percentage points lower than in San Bernardino County.
- Santa Clara County to Maricopa County
Almost 20% of the 1,300 people who followed this moving route are working from home, and, most likely, they can enjoy far roomier homes and nicer home offices in Arizona than they did back home. The average home here is 72%, or $945K, less expensive than in Santa Clara County.
During their first year here, half of these newcomers had actually purchased a home. It’s interesting to note that among immigrants to Maricopa County, individuals from Santa Clara County report the highest incomes—nearly $89K per year—with remote employment for Silicon Valley corporations probably being one of the main causes.
To read the full report, including more data, charts, and methodology, click here.
