Retirement Destinations
The turbulent economy may have cleaned out your retirement account. But your golden years aren’t completely lost.
According to U.S. News and World Report states that took most of the brunt of the housing collapse have emerged as front runners for the best places to retire. This is giving many people on the brink of retirement great locations at competitive prices. U.S News and World Report put together a list of the ten best places to retire financially. This is based on a price to income ratio which compares home values in the area and earnings. And the results may provide you with some surprising options. California has one of the highest unemployment rates in the country but the golden state lands on the list twice. Retirees can find homes in Napa and Santa Cruz. Here homes are priced at levels you could find eight years ago and there are worse things than having to decide between wine country and the beach. To pick the place to spend the rest of your lazy days just keep reading. After this recession we need a few more options for where to rest our weary heads.
10 Retirement Options
1. Bend, Ore.: Stiff demand from second-home buyers helped nearly double median home prices in lovely Bend, Ore., between 1999 and 2006. But the subsequent real estate collapse has dragged the area's price-to-income ratio from 3.4 in the third quarter of 2006 to 1.7 in the fourth quarter of 2009. That's below Bend's average price-to-income ratio of 2 for the 15 years ending in 2003. This increased affordability makes retirement property in Bend particularly attractive today, says Lester Friedman, president-elect of the Central Oregon Association of Realtors. "Central Oregon has always been a place where people came to get away," Friedman says. "And, of course, that is kind of the definition of retirement." Friedman points to a number of activities that can keep seniors busy in Bend year round, including hiking, mountain biking, skiing, fishing, boating, and volunteering. "We have wonderful college facilities, so continuing education is easy," he says. "You name it, we've got it."
2. Las Vegas: After speculation and risky loans juiced Las Vegas home prices by more than 141 percent from 1999 to 2006, the housing bust hit this desert playground with tremendous force. But the steep price declines have pulled down the area's price-to-income ratio from 3.2 in the fourth quarter of 2005 to 1.4 in the fourth quarter of 2009. For the 15 years ending in 2003, the average price-to-income ratio in Las Vegas was 1.9. SalesTraq President Larry Murphy says the return of affordability has created a great opportunity for seniors looking to spend their golden years in a sunny, low-tax community surrounded by golfing, gaming, fine dining, and entertainment. "There hasn't been a better time [to buy residential property in Las Vegas] in the last 12 years," he says.
3. Phoenix: From 1999 to 2006, home prices in Phoenix more than doubled, sending the area's price-to-income ratio to an inflated peak of just under 3. The subsequent meltdown in the residential real estate sector has dragged the price-to-income ratio in Phoenix to 1.5, which is below its 1.7 average for the 15 years ending in 2003, and has created opportunities for retiring seniors who are looking for bargains. "[In Phoenix] you have fairly good medical care, you don't have the snow and the cold and dangerous weather here, and you have a lot of nearby shopping centers and other things that make it easier for people to sort of carry out what they want to do," says Jay Butler, an Arizona State University associate real estate professor.
4. Napa, Calif.: Home prices in Napa, Calif., exploded during the housing boom, more than doubling from 1999 to 2006. But the real estate crash has reduced the sky-high price-to-income ratio of 3.9 it reached in the third quarter of 2005 to just 1.7 in the fourth quarter of 2009. For the 15 years ending in 2003, the average price-to-income ratio in Napa was 2.6. DataQuick President John Walsh says Napa's beautiful wine country offers "an extraordinary quality of life." And with home prices having retuned to 2002 levels, the area is ripe for seniors hunting for deals on retirement property, he said.
5. Fayetteville, Ark.: After a 40 percent increase from 1999 to 2006, median home prices in Fayetteville, Ark., have slipped about 21 percent through 2009. The recent decline has dragged Fayetteville's price-to-income ratio from 1.8 in the third quarter of 2005 to 1.2 in the fourth quarter of 2009. For the 15 years ending in 2003, the average price-to-income ratio in Fayetteville was 1.6. While the area may not have a reputation as a retirement hot spot, Fayetteville's low real estate taxes, natural splendor, and university affiliation make it a compelling option for retiring seniors, says Steve Clark, president and CEO of the Fayetteville Chamber of Commerce. "What we are finding is that the retirees that are beginning to focus on us are people who have done that first career for 25 or 30 years," Clark says. "They are not ready to really quit, they're just ready to quit what they are doing."
6. Punta Gorda, Fla.: Home prices in the quiet community of Punta Gorda, Fla., dropped more than 50 percent from 2006 to 2009, dragging the city's price-to-income ratio down to 1.4 by the end of last year. The area's average price-to-income ratio was 1.7 for the 15 years ending in 2003. The small town on Florida's southwest coast has long been a popular spot for boating and fishing. The recent price declines have provided seniors the opportunity to buy into this pleasant community at a discount, says Jack McCabe of McCabe Research & Consulting. Punta Gorda is "very nice, very laid back, very quiet, [and has] excellent fishing," he says.
7. Burlington, Vt.: Home prices in this tiny city increased significantly during the first part of the previous decade, which pushed the area's price-to-income ratio to 2.3 for the fourth quarter of 2005. A modest home-price decline since then has helped drag Burlington's price-to-income ratio to 1.7 for the fourth quarter of 2009, below its 1.9 average for the 15 years ending in 2003. Although the winters are long, Burlington provides retirees with "small-town comforts and small town values in [a] community where [they] can also enjoy arts, fine food, [and] performances that you wouldn't expect in a community of 39,000 people," says Yves Bradley of Pomerleau Real Estate. "There is also, I have to say, a very strong outreach to retirees to be engaged as volunteers, and that is pretty important here."
8. Fort Myers, Fla.: Home prices in the Fort Myers, Fla., area surged more than 180 percent from 1999 to 2005, thanks to investors and easy lending practices. But because of the market crash, area real estate prices have lost about two thirds of their peak value. Meanwhile, the price-to-income ratio of Fort Myers-area houses has declined from 3.2 in the fourth quarter of 2005 to 1 in the fourth quarter of 2009. For the 15 years ending in 2003, the average price-to-income ratio in the Fort Myers area was 1.5. McCabe says the Fort Myers area has a great deal to offer retiring seniors. The area has "more of a relaxed, laid-back, slower-paced environment with Midwestern values [that would be] very appealing to that kind of core of the country--Illinois, Indiana, Michigan, Iowa, Minnesota," he says.
9. Santa Fe: A 24 percent decrease in median home prices over the past two years has helped drag the price-to-income ratio in Santa Fe to 1.8 for the fourth quarter of 2009, which is below its 2.5 average for the 15 years ending in 2003. Lois Sury, president of the Santa Fe Association of Realtors, ticks off a number of reasons why seniors should consider taking advantage of this increased affordability and buy property in the area. Attractions include great skiing, hiking, medical facilities, arts, as well as a rich cultural history. "Here we have this beautiful, sometimes cobalt-blue sky that sits on your shoulders," Sury says. "That's what people come here for--it's the sun sets and the mild climate, [and] the friendly people."
10. Santa Cruz, Calif.: Median home prices in the California costal community of Santa Cruz have plummeted more than 57 percent since 2007, reducing its price-to-income ratio to 2.8 for the fourth quarter of 2009. The average price-to-income ratio for Santa Cruz was 4.3 for the 15 years ending in 2003. Like Napa, Santa Cruz offers seniors a pleasant environment from which to launch their golden years, and the recent home price declines make it all the more attractive, Walsh says. "Santa Cruz [and Napa]...are trading at the exact same price they were eight years ago," he says. "That's a heck of a deal."
