California is losing population. But that does not mean every local housing market is losing demand.
California did lose population in 2025, and the state continues to experience substantial domestic outmigration. It was also ranked the third worst state to move to in 2026 by ConsumerAffairs, with affordability weighing heavily on that ranking. So there is no question that California has a real affordability and migration challenge.
But statewide population numbers do not tell us what is happening in every community.
In East County, La Mesa, El Cajon and Santee all saw their populations decline between 2025 and 2026. At the same time, each city added housing units. San Diego County as a whole actually gained residents.
That gives us a very different picture from the idea that people are simply leaving and housing demand is disappearing. To understand what this means for East County home values, we have to look at how population, households, housing supply and actual market activity are moving together.
What Is Driving California’s Population Decline
California has been losing more residents to other states than it gains from them for more than two decades. In 2025, that net domestic outmigration reached about 288,600 people.
What changed in 2025 was the number of people arriving from outside the country. International migration into California fell sharply, from about 248,400 people in 2024 to 126,400 in 2025.
Put those two trends together, and California’s overall population declined. More people were leaving for other states, while fewer people were arriving from other countries to offset those losses.
The Department of Finance puts a number on that difference. Without the drop in international migration, California would have added roughly 66,000 residents in 2025 instead of losing about 54,000.
East County’s Population and Housing Numbers Are Moving in Different Directions
Yes, some East County communities are losing population.
Between January 1, 2025 and January 1, 2026, La Mesa lost 156 residents, El Cajon lost 517 and Santee lost 232. Lemon Grove also declined by 212 residents.
But there is another number worth looking at.
During that same period, all four communities added housing units.
La Mesa added 237 housing units while its population declined by 156 residents. El Cajon added 234 units while losing 517 residents. Santee added 156 units while losing 232 residents.
That does not mean the new homes are sitting empty, or that people are simply leaving these communities.
Population and housing numbers can move in different directions. Household sizes change, people move between homes, children leave their parents’ homes, and some homeowners downsize. A community can therefore lose residents without seeing the same decline in the number of households that need housing.
San Diego County shows why the local picture matters. While several East County cities lost residents, the county gained 4,930 people and added more than 14,000 housing units.
I would also be careful about calling these city-level changes “outmigration.” The state data shows us that population declined, but it does not tell us where those residents went.
What we can say is simple: several East County communities lost population while continuing to add housing.
That is a trend worth watching. But it is not, by itself, evidence that housing demand has disappeared.
Why People Are Leaving California
Housing affordability is one of the biggest pressures behind California’s domestic migration patterns. The Public Policy Institute of California has identified the state’s high cost of living, particularly housing costs, as an important factor in where people choose to live. Lower-income households are more likely to leave the state than higher-income households.
That is understandable when you look at the cost of owning a home in communities such as La Mesa, Santee and Mt. Helix.
For perspective, California Association of Realtors’ second-quarter 2026 affordability data estimated that a typical California single-family home required about $228,400 in annual qualifying income, based on a monthly payment of roughly $5,710 including taxes and insurance.
That is a significant financial commitment, particularly for households whose income has not kept pace with housing costs.
At the same time, California still has powerful reasons people want to live here. The state has major employment centers, a large and diverse economy, a desirable climate and communities that continue to attract people from around the country and the world.
The challenge is that the cost of accessing those advantages has become increasingly difficult for many households to absorb.
California’s housing problem is tied to strong demand and constrained supply, while high land, labor and financing costs make new construction expensive and difficult.
That helps explain why I would not describe California’s population decline simply as people deciding they no longer want to live here.
For many households, the decision to leave comes down to whether the cost of living still makes financial sense.
Population Decline Does Not Automatically Mean Lower Home Values
Population decline can put pressure on home values over time, but it does not happen automatically.
What matters is the relationship between households, housing supply, employment, income and mortgage rates.
If a community loses households while continuing to add homes faster than new households are forming, the buyer pool can eventually shrink. Sellers may have to compete more aggressively for buyers, which can lead to longer marketing times, more price reductions and greater negotiating power for buyers.
That is not what the latest East County population numbers tell us by themselves.
The California Department of Finance’s population estimates take housing units, occupancy, household size and other factors into account. That is important because La Mesa, El Cajon and Santee all added housing units while their reported populations declined.
The numbers show that the relationship between people and housing is changing. They do not show that housing demand has disappeared.
The risk would look different if East County continued losing households while adding housing substantially faster than demand was growing, particularly if domestic outmigration accelerated.
That is the trend I would watch.
My Read on the East County Market
I would not panic over the population headline.
California’s affordability problem is real, and its long-term domestic outmigration is real. But neither one tells us what a specific East County home is worth.
California ranked 50th out of 50 states for affordability in the 2026 ConsumerAffairs ranking. That reflects how difficult the cost of living has become. It does not, by itself, indicate that home prices in East County are about to fall.
If more than two decades of domestic outmigration were enough on its own to push East County home values sharply lower, we would have seen a very different housing market by now.
We have not.
There is also a physical limit to how much new housing can be added in established communities, particularly when developable land is limited. Areas such as Mt. Helix, Fletcher Hills and older parts of La Mesa do not have unlimited land available for new single-family neighborhoods.
The broader San Diego County market is also not behaving like a market where demand has disappeared. Through June 2026, my market analysis showed closed sales up 9.5 percent year over year, a countywide median price of $950,000 across residential property types, active inventory down 15.3 percent and roughly three months of supply.
That looks more like a market with limited supply and continued demand than one where buyers have disappeared.
Population and home prices are also measuring different things.
Population tells us how many people live in an area. Home prices reflect the interaction between buyers, sellers, financing conditions and the homes actually available for sale.
Those numbers can move in different directions.
What This Means for East County Sellers
The focus should be the property and the local comparable sales, not the statewide population headline.
Population Decline Does Not Mean Your Buyer Pool Has Disappeared
Household size matters.
If fewer people are living in each home, certain features can become more valuable to buyers, including single-level layouts, usable outdoor space, lower-maintenance living and flexible rooms.
A four-bedroom home in Santee does not suddenly become a poor property because the average household is getting smaller.
The buyer’s priorities may simply be changing.
Price From the Local Market
The mistake would be reacting to the population headline by pricing below what the property can reasonably command.
The opposite mistake is assuming limited inventory gives you room to price well above comparable sales.
Neither approach is reliable.
Recent comparable sales, condition, location, lot, layout and current competition all matter when pricing a home in a specific pocket such as Fletcher Hills.
The list price should reflect the property and the market immediately around it.
Understand the Property’s ADU Potential
This can be especially relevant on larger East County lots.
For properties in areas such as Mt. Helix, Eucalyptus Hills and parts of Santee, the ability to add a second unit can affect how a buyer evaluates the property.
That is something I would want to understand before the home goes on the market.
What This Means for East County Buyers
Buying in East County should come down to the property, the cost of ownership and whether it fits your plans, not a statewide population headline.
A buyer looking near La Mesa Village has different considerations from someone looking for a larger lot in Eucalyptus Hills or a newer home in Santee.
I would look at the actual cost of ownership, location, condition, commute, neighborhood and how well the property fits your next stage of life.
Population headlines should provide context, but they should not make the decision for you.
Moving Out of California Is a Financial Decision
If you already own in East County, moving is ultimately a personal financial decision.
Consider the equity you have built, the cost of selling, what you would buy or rent after moving and whether leaving California actually improves your financial position.
If the cost of owning in California no longer works for your household, leaving can be a completely reasonable financial decision.
That is different from assuming everyone is leaving and East County housing is headed for a collapse.
The local numbers do not support that conclusion today.
East County Still Makes Sense for the Right Buyer
I would still recommend East County to the right buyer and for the right property.
Being in San Diego alone is not enough.
The actual cost of ownership, location, condition, commute, neighborhood and how well the property fits the buyer’s next stage of life all matter.
There is no single California housing story that accurately describes every community.
East County has its own supply, demand and affordability dynamics, and those local factors matter far more when evaluating a specific property.
The Bottom Line
California’s population decline is real.
Domestic outmigration is real.
The affordability problem is real.
But none of those facts creates a simple formula where fewer residents automatically means lower East County home values.
La Mesa, El Cajon and Santee all lost population while adding housing units. San Diego County gained residents. California’s 2025 population decline was also heavily influenced by the sharp reduction in international migration.
What I will continue watching is the relationship between households, housing production, inventory, mortgage rates and actual closed sales.
That is where the housing market will tell us what is really happening.
If you own in East County and want to understand what these trends mean for your particular property, I am happy to walk through the local numbers with you.
Further Reading
East County San Diego is not like other markets. Weather, insurance, wildfire exposure, and lifestyle all shape how homes are bought, sold, and owned here. If you want to go deeper, the article below is a good place to start.
How Much Equity You Need Before Moving Actually Makes Financial Sense
Is East County the Right Market for You?
East County San Diego is not a compromise on coastal living. It is a deliberate choice. The terrain, the pace, the price points, the communities themselves. All of it adds up to something specific. The buyers and sellers who do best here came in knowing what they were looking for.
A discovery session is where that clarity gets built. We will talk through your priorities, your timeline, your budget, and the neighborhoods that genuinely fit. You will leave knowing where to focus.
No pressure. No pitch. Just a straight conversation with someone who knows this market cold.
Already have a specific property or neighborhood in mind? Reach out directly and I’ll give you a straight read on it.
