Migration out of California is not a new trend. To be sure, the success of the California economy creates challenges around affordability, and this has driven more migration out of the state in the last few years, according to research by JLL. Moreover, migration shifts are occurring throughout the country for a variety of reasons, not just from California.

Corporate expansion into new markets from the West Coast has been occurring since before COVID, but the high cost of living and doing business in these markets has accelerated out-migration of both companies and talent. But in many cases, entities that relocate corporate headquarters elsewhere continue to maintain a presence in California.

Despite the move-outs, California remains the leader in innovation and funding of new ideas. Public company performance of California-based companies increased last year, even accounting for the headquarter relocations by Oracle and HP.

In the end, California has a high cost of doing business, but its irreplaceable talent pool and innovation clusters will continue to drive growth forward. As a result, all major California markets are expected to outpace the United States in terms of employment growth and GDP through 2024, says JLL.

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