California’s Unique Advantages Are Drawing People Back After Years of Migration

A sunny California street lined with palm trees, homes, and people engaging in outdoor activities, representing the welcoming California lifestyle.
“Experience the sunny California lifestyle: palm-lined streets, charming homes, and vibrant outdoor living

In recent years, California has faced its fair share of criticism, primarily due to its high cost of living, which led many residents to seek refuge in “cheaper” states like Texas, Florida, and Tennessee. While lower home prices and attractive tax benefits seemed like a win at first glance, many of these moves are now being reconsidered. Today, California is experiencing a surprising shift: more people are returning to the state than ever before, surpassing pre-COVID levels.

Ironically, many of those who left are now coming back for the very reasons they initially fled—better safety regulations, greater economic opportunities, and a higher overall quality of life. California’s advantages are becoming clearer with time, making it the smarter choice for those looking at long-term success. Here’s why the “cheaper” states might not be as cost-effective as they seem, and why moving to or back to California may be the better option.

Why People Are Returning to California

For years, people flocked to states like Texas and Florida, hoping to escape California’s high home prices and taxes. However, they soon discovered that while these states offered cheaper housing and lower taxes, they came with hidden costs that undermined the savings. From high insurance premiums to lower wages and unstable property taxes, residents are now beginning to realize that California’s higher living costs might be justified by its broader benefits, making it a better long-term choice for financial stability and overall well-being.

1. Economic Stability with High Wages

California’s economy is one of the strongest in the nation, providing residents with some of the highest wages across various industries. With a median household income of $91,905, California far outpaces the national averages of Texas ($71,522), Florida ($65,937), and Tennessee ($59,695). This higher income allows residents to handle the higher housing costs and still have a better quality of life.

In states like Texas and Florida, lower wages make it difficult for residents to maintain financial stability in the face of rising costs. While it might seem appealing to move for lower housing prices, lower wages can make it harder to manage day-to-day living expenses, leading to greater reliance on credit cards and personal debt. In contrast, California’s robust economy offers ample job opportunities across tech, healthcare, entertainment, and more, allowing residents to grow their incomes and enjoy a more secure financial future.
Oxfam America ranked California as the second-best state in the United States to work in.  

This ranking is based on several factors, including:

Employees’ rights to organize: California received a perfect score of 100 out of 100 for rights to organize. 

Wage policies: California received a score of 75.27 out of 100 in this category.

Worker protections: The state scored 85.71 out of 100 for worker protections.

2. Insurance Costs—A Hidden Burden in Other States

Insurance premiums are another hidden cost that makes living in states like Florida, Texas, and Tennessee far more expensive than it appears.

In Florida, the average homeowner pays around $4,231 annually for insurance due to the risk of hurricanes, and many insurers have pulled out of the state due to the unpredictable storm seasons. Texas and Tennessee, while less prone to hurricanes, still face extreme weather conditions, driving up insurance costs. Homeowners in Texas pay about $3,081 annually for home insurance, which often doesn’t include the additional flood or windstorm insurance many properties require.

In contrast, California boasts a relatively stable climate and lower insurance premiums, with the average cost being only $1,565 annually. Over the course of a 30-year mortgage, this difference in insurance premiums can save homeowners anywhere from $75,000 to $90,000. These savings allow residents to invest in their financial futures, making California a more affordable state in the long run.

3. Stable Property Taxes and Prop 13

While California does have higher state income taxes, its property tax system is far more predictable and stable than in states like Texas and Florida. Proposition 13, passed in 1978, ensures that property taxes are assessed based on the purchase price of a home, with no reassessment until the property is sold. This means that once you purchase a home in California, your property tax rate remains stable, no matter how much the home’s value increases over time. Prop 13 limits the amount property taxes can increase annually to 2%, giving homeowners the ability to plan their finances with certainty.

By contrast, property taxes in states like Texas can be as high as 1.80% of a home’s value. On a $300,000 home, that’s an annual tax bill of $5,400—more than double what the same property would incur in California, where the average property tax rate is just 0.73%. Additionally, Florida’s additional fees for hurricane and flood management can add further strain to homeowners’ finances.

4. Proposition 19—Tax Benefits for Homeowners

California’s Proposition 19, which passed in 2020, further enhances the state’s appeal by allowing homeowners over 55, disabled individuals, and wildfire victims to transfer their existing property tax assessments to a new home. This means that if you sell your home and buy another one within the state, you may be able to maintain your lower property tax rate—helping mitigate some of the financial challenges that come with moving within California. This benefit helps ensure that homeowners aren’t penalized by high property tax increases when relocating within the state.

5. Foreclosure Rates and Financial Security

One of the most significant indicators of financial strain is foreclosure rates. In California, foreclosure rates are among the lowest in the nation, with only 1 in every 2,627 housing units being foreclosed upon. This reflects not only stronger economic conditions but also the state’s strong consumer protections, which help prevent individuals from falling into financial distress.

In contrast, foreclosure rates in Florida, Texas, and Tennessee are notably higher, reflecting the financial pressures that come with high insurance costs, lower wages, and fluctuating property taxes. For example, Florida has a foreclosure rate of 1 in every 1,841 housing units, while Texas is at 1 in every 2,059. These higher foreclosure rates suggest that residents in these states face greater financial strain, making them less likely to build wealth and long-term financial stability.

6. Wealth Building Opportunities and Financial Growth

California’s higher wages, lower insurance premiums, and stable property taxes don’t just help residents stay afloat—they create wealth-building opportunities. The savings on insurance and property taxes can be reinvested into retirement accounts, education, and other investments that generate long-term financial security. California’s thriving economy offers numerous job opportunities across various industries, from tech to entertainment to healthcare, allowing residents to continually grow their earnings and investments.

In contrast, the lower wages and higher hidden costs in states like Texas and Florida limit the ability to save and build wealth. Although housing might be cheaper, the overall economic environment in these states often limits long-term financial growth.

7. Health Insurance + Housing Costs: The Real Monthly Hit

Let’s do what Zillow memes never do: look at the full cost picture.
Sure, a $350,000 home in Arizona or Texas looks “cheaper” than a $700,000 starter in San Diego. But here’s what they’re not telling you:
🏥 Healthcare:
California has 10 competitive insurance providers in the individual market—some “cheaper” states have as few as one, which means less choice and higher premiums.

Thanks to expanded Medi-Cal and generous state subsidies, California boasts the highest insured rate in the nation, covering about 94% of residents. Many qualify for low-cost plans starting as low as $10/month through Covered California. About 90% of enrollees receive financial assistance, and some even qualify for $0 premiums.

For example, individuals earning under $25,760 annually can find quality plans averaging around $43 per month. Medi-Cal provides free or very low-cost coverage for eligible low-income residents, including undocumented individuals, making healthcare accessible to many Californians who might otherwise go uninsured.

In contrast, states like Texas and Florida:

  • Offer fewer insurance options, less competition, and higher premiums
  • Have rejected Medicaid expansion, leaving millions in a coverage gap
  • Families often pay $1,200–$1,600/month for mid-tier plans, with higher deductibles and fewer benefits

So while people think they’re “saving” $500/month on a mortgage, they’re often spending that—or more—on health insurance alone—and getting less coverage and fewer protections in return.

So what’s the actual outcome?

You move to “save money”…
But after adding up insurance, taxes, gas, and medical bills—you’re breaking even or losing ground, with fewer protections and lower long-term equity.

California isn’t expensive—it’s transparent.
Other states just hide the costs until it’s too late.

The Grass Isn’t Always Greener

Moving to states like Texas, Florida, and Tennessee may seem like a financially sound decision on the surface, but the hidden costs—like higher insurance premiums, unstable property taxes, and lower wages—often negate the benefits. The true cost of living in these states can far surpass what people initially expect.

California, with its higher wages, lower insurance premiums, stable property tax system, and strong consumer protections, provides a solid foundation for long-term financial success. The state’s thriving economy, diverse job opportunities, and commitment to regulations that ensure safety and fairness offer residents a higher quality of life and a greater chance for financial growth.

Think Long-Term

While the appeal of lower home prices and no state income tax is strong, California’s overall advantages—high wages, low insurance costs, stable property tax systems (thanks to Prop 13 and 19), strong consumer protections and long-term financial protections—make it the smarter choice in the long run. More people are realizing this, and as a result, California is seeing an increase in return migration. The state’s unique advantages offer both financial and personal growth opportunities that many other states simply can’t provide.

The grass may seem greener elsewhere, but in reality, California’s landscape is filled with opportunities for those who choose to stay or come back.

SEE ALSO

The Hidden Costs of Moving: Why Leaving California for “Cheaper” States May Not Save You Money

The Hidden Costs of Moving: Why Leaving California for “Cheaper” States May Not Save You Money

References

Additional Sources:

  • Florida Ranks Fifth in Cost-of-Living Crisis, alongside other Southern states like Louisiana, Mississippi, and South Carolina.: What It Means for Residents and Families  Central Florida Lifestyle
  • Study: Sunbelt States Have Higher Household Debt Than Midwest States WRE News
  • The U.S. States Most Impacted By Household Debt 2023 National Business Capital

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