California's massive exodus. (35th year in a row with domestic out-migration)

Key Concepts

• Domestic Outbound Migration: The net movement of people from a state to other states within the same country.
• International Immigration: The movement of people into a state from other countries.
• Birth-to-Death Ratio: A metric comparing the number of births to the number of deaths in a population. A ratio above 1 indicates more births than deaths; below 1 indicates more deaths than births.
• Demographic Headwinds: Factors related to population changes (like migration and birth rates) that negatively impact economic growth or housing demand.

California’s Population Decline & Housing Market Outlook

California is experiencing a sustained period of population loss, marking the 35th consecutive year of net domestic outbound migration. Data from the US Census Bureau indicates a net loss of 229,000 residents to other US states in 2025. While this represents a decrease from the peak of 470,000 departures during the pandemic, it remains significantly above historical averages. This trend has been consistent since 1991.

Counteracting Factors & Their Diminishment

For the past three decades, California has mitigated the effects of domestic out-migration through two primary mechanisms: international immigration and a natural increase in population (more births than deaths). However, both of these factors are now weakening.

The birth-to-death ratio has dramatically declined. Currently, it stands at 1.37, signifying only 37% more births than deaths. In contrast, in 1991, this ratio was 2.86, representing a 186% surplus of births over deaths. This shrinking natural increase contributes to the overall population decline.

Current Housing Market Status

Despite the ongoing population loss, California’s housing market hasn’t yet experienced a substantial downturn. Home prices remain at record highs, with the typical home value exceeding $700,000 statewide. In Los Angeles and San Diego, prices surpass $1 million in many areas. While housing inventory has recovered somewhat, it remains relatively low. Consequently, short-term projections suggest California home prices will likely remain flat or experience a slight decrease.

Long-Term Bearish Outlook

However, the speaker expresses a growing bearish outlook on California’s long-term housing market prospects. This pessimism stems from the aforementioned demographic headwinds – the combination of continued domestic out-migration and the slowing of both international immigration and natural population growth. The speaker believes these factors will eventually exert downward pressure on housing demand and prices.

Data & Resources

The analysis relies on data from the US Census Bureau regarding domestic migration. Further investigation into demographic trends and migration patterns at the county and metro area level within California is encouraged, with the speaker directing viewers to ww.reventure.app to access domestic migration and birth-to-death data under the “Demographic and Investor Metrics” section.

Synthesis

California’s long-term population trends are shifting, moving away from growth and towards decline. While the housing market has remained resilient in the short term due to limited inventory and high demand, the speaker anticipates that demographic changes will ultimately lead to a weakening of the California housing market. The combination of fewer people moving to California and fewer births relative to deaths presents a significant challenge to sustained housing price appreciation.