Photo © David Blevins Eastern Gray Squirrels usually live in forests, but they are also seen in yards, gardens, and city parks. Basically, they live anywhere there are large, deciduous trees (trees whose leaves die in the Fall).These squirrels live in trees year-round, either in cavities or nests they build out of leaves.hey are easy to see in the Winter, when the nest leaves have turned brown and tree leaves fall to the ground. The trees most commonly used by Eastern Gray Squirrels to live in are White Oak, American Beech, American Elm, Red Maple, and Sweetgum, though they will use others also.