Season 2, episode 20. "Dennis' Birthday"...... Spring Byington Was visiting the Mitchell's neighbors and mentioned she was there because she had a press thingy out East and thought she would stop in...... This suggests the Wilsons/Mitchell's lived out East or Somewhere in Michigan, Pittsburg or Ohio.... In Season 1 Mr. Wilson or Tommy pointed to the Mountains and mentioned the Ocean was on the other side.... So many references to where the writers placed the series it could have been anywhere in their minds.... There were a few writers also and they may have each had their own State in mind....

Was just watching "Mr. Wilsons Paradise" Season 2 and toward the end Henry Mitchell mentioned that Mexico was just a bit over a 2 hour flight from their house..... Another clue.... But not a clue...

I always thought they lived out west. After Joseph Kearns died, George's character was said to be "back East" settling an estate. Here in the Midwest, we don't say "back east." That is a western saying.
When they fly to D.C. in the fourth season, the flight takes three hours or so.
In one first-season episode, George mentions the state capital as being over 500 miles away (I think that's the episode with the Canadian bird in which the writers took pains to say "this state" instead of any specific state). That alone narrows the list to California, Texas or Alaska, and I think we can agree they definitely don't live in Texas or Alaska.