San Francisco Bay Area residents spent years leaving one of the country’s most expensive housing markets, and now, new research shows the move paid off.
Among those who left California altogether, homeownership rose 33% within five years, according to a new report from the California Policy Lab at the University of California, Berkeley (CPL). The increase is all the more striking because Bay Area movers were about one-third less likely to own a home than the neighbors they left behind.
Based on anonymized credit bureau data tracking Bay Area households before and after relocating, these findings come amid a remarkable regionwide reversal.
After losing tens of thousands of residents and billions of dollars in household income in the thick of the COVID-19 pandemic, San Francisco is experiencing a comeback in earnest.
New jobs and extraordinary amounts of tech wealth have helped reinvigorate the City by the Bay—but they have also flooded an already expensive housing market with buyers capable of bringing enormous sums of cash to the closing table.
For those who left before the new frenzy took hold, the timing is striking: Their odds of owning improved after they entered cheaper housing markets, just before the financial bar for competing back home began rising even higher.
Housing costs were already pushing Bay Area residents out
The housing math helps explain why people were leaving in the first place.
In June, the median existing single-family home in the nine-county Bay Area was sold for $1.4 million, according to the California Association of Realtors. That’s more than $495,000 above California’s already lofty $904,640 median—and more than three times the national median of $446,400.
Renters face a similar premium. The median asking rent for a studio through two-bedroom unit was $2,907 in the San Francisco-Oakland-Fremont metro and $3,423 in San Jose in June, according to Realtor.com. That was 72% and 102% higher, respectively, than the $1,692 median across the nation’s 50 largest metros.
And the outflow extended across nearly the entire region. Since 2014, every Bay Area county save one has lost more residents than it gained through migration, according to the CPL analysis.
The exception was Solano County, the region’s most affordable by nearly every measure. Its median listing price was $588,000 in June, according to Realtor.com. That’s less than half San Francisco’s, which experienced some of the starkest losses.
Between April 2020 and July 2021 alone, San Francisco County lost 58,764 residents, or 6.7% of its population, according to the U.S. Census Bureau. Among U.S. counties with at least 20,000 residents, only Manhattan experienced a larger percentage decline.
And people weren’t the only thing leaving. Between 2019 and 2021, nearly $15 billion in household income left San Francisco through migration, according to an analysis by the Hoover Institution.
Leaving put dramatically cheaper housing within reach
Those who left the Bay Area didn’t have to go very far to reach a dramatically different housing market.
Out of every 20 Bay Area movers, roughly 11 remain in the same county and four move somewhere else within the Bay Area, according to the CPL analysis. About three leave California altogether, while the remainder settle elsewhere in the state.
On average, they land in neighborhoods where home values are about 50% lower and rents are 33% lower than in the communities they left.
That difference shows up in the homeownership rate fast. Within just one year of moving, homeownership among Bay Area movers increased between 11% and 18%, depending on where they went.
And the people making those moves weren’t necessarily the affluent Bay Area homeowners one might imagine. Before moving, they were financially weaker than their neighbors, with credit scores 23 points lower and 2.3 times as much student debt—$10,827 compared with $4,618 among their neighbors.
Jenna Yost Hoyas, a San Diego real estate agent, has had a front-row seat to the trend, helping transplants find a place of their own in Southern California.
“One of the biggest differences Bay Area buyers notice is how much further their budget goes in San Diego,” she says. “The same budget often gets them closer to the water, more square footage, newer construction, or outdoor living space that would have been difficult to find in Northern California.”
San Diego is hardly an inexpensive city—the median listing price across the San Diego metro was $839,000 in June. But for buyers accustomed to the Bay Area, even another premium California market can offer a noticeably different experience.
“While San Diego is still a premium market, buyers often feel they’re getting substantially more home for the same investment,” Hoyas says. “We also tend to see less competition at the higher price points than many buyers have experienced in the Bay Area, making it easier to purchase without the intense bidding wars they’ve become accustomed to.”
Becoming a homeowner came with trade-offs
Even so, the cheaper housing came with costs of its own, according to Evan White, executive director of the California Policy Lab and a co-author of the report.
“The Bay Area continues to offer tremendous economic opportunity, but it’s also the most expensive metro in the country,” he says. “Our research shows many residents are achieving affordable homeownership elsewhere, but often at the cost of lower incomes, lower-performing schools, or greater climate risk.”
Importantly, those differences weren’t simply a reflection of where leavers had started out.
Before moving, Bay Area leavers came from neighborhoods that closely matched those of the residents who stayed. Median home values differed by just 2%, rents by 1%, and per capita incomes by 5%, according to the analysis. In fact, those who left came from neighborhoods with slightly higher incomes and home values, on average.
But their destination neighborhoods had incomes as much as 23% lower than their old neighborhoods, with lower-performing schools and climate risk that was higher by as much as 8 percentile points.
Hoyas says another trade-off comes up repeatedly in the buyers she works with: distance from the place they left behind.
“The biggest trade-off is usually proximity to the Bay Area itself,” she says. “Many of my clients don’t view the move as leaving the Bay Area behind entirely. San Diego is only about a 90-minute flight from San Francisco, making it easy to commute for important meetings while enjoying a very different lifestyle at home.”
Then AI wealth flooded the market they left behind
San Francisco’s fortunes began to reverse in 2024. Since midyear, more people have been arriving than leaving, according to the CPL analysis. This shift may reflect the rise of AI, along with more return-to-office mandates, researchers say.
The scale of the money flowing into the region is difficult to overstate. Since 2020, roughly 80% of the $578 billion invested in U.S. AI startups has gone to companies headquartered in the Bay Area, according to CBRE and PitchBook.
It’s a monumental sum that doesn’t even account for the stock wealth. OpenAI alone awarded employees about $80 billion in vested equity by early 2026, according to The Information.
And now, that wealth is changing what buyers are willing—and able—to pay. In March, San Francisco’s median home sale price reached a record $2.15 million, up 18% from a year earlier and surpassing the previous record set in 2022.
At the same time, Bay Area luxury buyers put down a median of 35% in 2025, even as down payments in comparison markets retreated from their 2023 peaks, according to a Realtor.com analysis. Almost 7 percentage points of the difference could be attributed to AI-related wealth.
And the pressure is beginning to spill down the market. The same analysis found evidence that buyers crowded out of the luxury tier by competitors wielding AI equity are moving into lower-price bands with more cash, increasing competition there as well.
Kristina Quesada, a San Diego-based agent, says the effects are even reaching markets outside the Bay Area.
“The AI industry has created tremendous wealth while also giving many professionals greater flexibility in where they choose to live,” she says. That combination is now extending the AI boom’s influence into some of the same markets Bay Area leavers moved to.
The contrast with the movers CPL followed is hard to miss. For them, leaving came with real sacrifices. But it also gave many of them access to something that has only become more expensive back home: homeownership.
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