Housing Crash Casts a Chill on Sunbelt Retirements

Category: General Retirement Issues

November 22, 2011 — One of the regular questions we get from journalists and researchers is – where are today’s retirees moving for their retirements? It’s a tough question on which to find information. Fortunately some new data from the IRS puts some welcome dimension to the issue. Note that these immigration figures are for people of all ages, so while directionally useful, they are still not specific to people of retirement age.

Who Slammed on the Brakes?
The most startling finding from the IRS data is how quickly the recession put the brakes on the traditional migrations of people from populous but stagnating states like California, New York, and Massachusetts to the Sunbelt states. As an example, while New York had an average net migration to other states of 148,000 between 2001 and 2006, that slowed to 99,000 people in 2008 and just 71,000 in 2009. California, which saw over 200,000 folks leave the state in 2005, saw that figure drop to just 71,000 in 2009.

Where They Are Moving to (but less frequently)
On the receiving end of this migration, sunbelt states like Nevada, Arizona, and Florida that had been absorbing cold weather out-migrations have seen an equally sharp change. Florida, for example, had a net inflow of 209,000 people from all states in 2005, but had a net loss of 30,000 in 2009, perhaps its first net immigration loss in history. During that same time the net immigration from New York State to Florida declined from a loss of 62,600 to only 8,000 – a remarkable turnaround. North Carolina, also a

popular spot for retirees, also saw a dramatic decline in net immigration. Whereas New York had a net immigration loss to the Tarheel State of 17,000 in 2006, that figure had dropped in half by 2009.

So Why Aren’t People Moving?
The most commonly given and the most logical explanation for these immigration changes is that people cannot sell their houses, keeping them stuck where they live now. Another is that they can’t find a job in a new state. When it comes to retirees, there are undoubtedly many who had planned to retire and move to the Sunbelt, but who now find they do not have enough money to retire, so they continue to work or look for work.

For Further Reference:
Economy Alters How Americans are Moving” from the New York Times.
Outward Bound New Yorkers
The Best Places to Retire as Preferred by Takers of the Retirement Ranger
IRS Migration Profile: Lets You See Net Migration By State and Year
Dueling States: How North Carolina Climbed Over Florida for Retirement
Dueling Retirement States: Arizona vs. Florida

What do you think? We always love reading your comments. Have you delayed retiring, or decided to stay up north or in California where you already live? What are your plans, and has the recession changed them?

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Posted by Admin on November 21st, 2011

11 Comments »

  1. Don’t forget that a person up north would be selling their home for less, but also be purchasing a house in the south for less, too. Also, I believe some homes in NY or NJ have retained more of their value than in other parts of the country.

    That people want to stay where they might get a part time job makes sense. So does ‘being there’ for children in these tricky employment days, in case the kid gets laid off and needs a place to crash. In tough times families tend to stick together.

    Also, I have read that there is a movement away from retirement communities due to the lack of proximity to cultural centers, teaching hospitals, major libraries, etc. There was, I believe, before the economy tanked, a movement into cities. I think a main reason why people shunned cities was safety and since the crime rate has dropped there is less of a reason to stay away.

    by Goldengrain — November 22, 2011

  2. We are retired, living on a boat and have fallen in love with Florida. It was actually last on our list because of hurricanes but we liked it so much we were willing to ignore that issue. It is not “stoggy” as we had expected and there are a large number of younger people. Our favorite city was Jacksonville. BUT, getting homeowners insurance is either expensive or impossible to get. Talking to folks who live there, we find that insurance can be cancelled from one year to the next. It is the primary reason we have not bought in Florida, even though housing prices are quite low.

    by Linda — November 23, 2011

  3. We are going ahead with plans to be in Arizona by this time next year. We plan on buying a house in the spring and making whatever improvements are needed, and moving in late summer. We will be dealing strictly in cash. Living below our means is actually paying off. We have no mortgage on out current home and can put it on the market at a realistic price. Sure, we will get less than we paid for it in ’96 but we will be buying at fire sale prices.

    by Bruce — November 23, 2011

  4. I agree with Goldengrain! A great thing about our community, Lake Weir Living in central Florida (8 miles from The Villages), is that new custom homes are affordably priced. Even if Boomers sell their homes for less, they’re still able to buy a new Florida home they designed and customized within their budget. Neil

    by Neil Schuster — November 23, 2011

  5. We are still planning to move to Tennessee in 2012. By choice, both of us will continue to work, so we aren’t really retiring, just escaping the coming economic implosion in Illinois. Our only concern is selling our current home, but the market seems to be fairly good in the Chicago suburbs. We will probably get a lower price for our house, but, as other commenters have said, we will also be paying less for our new home.

    by Gary — November 23, 2011

  6. I’m a native Californian, and am planning to retire in 2013, when I turn 66. Although, I have lived in the Bay Area my entire life, I am looking at active adult communities in Florida, Texas and Arizona, because I could buy a home in one of those places, and my payments would be slightly more than 1/2 of what I now pay for rent for a 1 bedroom apt. in the Bay Area. I’m also looking for a place with less traffic; my 15 mile commute now takes 1 hour.

    by Liz Hull — November 23, 2011

  7. We ‘retired’ to FL many years ago, but are now returning to SoCal to be with Family and friends. As you get older, it becomes more important to be closer to those you love and care about. Also, we have finally found a great Independent living community in Orange County!

    by Mary — November 24, 2011

  8. I retired in May and my wife will retire in January. We just got a sales contract on our home in central CT and will receive $500.00 less than what we believe is a fair market value. Our house was on the market for 192 days.

    We plan to move to Prescott Valley, Arizona on February 1. We can live so much less expensively in Arizona than in CT and will be living in an area that better aligns to our social and political mindsets. We will rent a home until we find a perfect setting and then purchase. We have already downsized our material possessions and lifestyle.

    Both my wife and I intend to find part time employment to raise “fun money”, albeit more importantly to remain socially and intellectually active. We see “retirement” as the fourth phase of our live’s journey – and we cannot wait to set out on that adventure.

    Happy Thanksgiving and good cheer to all.

    by Richard — November 24, 2011

  9. Our retirement plans are still on track. We have never planned on moving to any kind of retirement community – I want to live in the real world, not someone’s idea of a fantasy retirement community for older folks. While we might not move to Florida on a permanent basis, it is certainly(still) possible that we will buy a retirement home somewhere in FL – probably along the gulf coast. We have lived in many places during our work years, but will stay away from states that love to tax retirement income and have high property/school taxes.

    by Rich — November 24, 2011

  10. Husband & I had visited FL several times in winter and loved getting away from our cold home state. Then we stayed in FL for several winter months two years in a row and thank God we did! We found FL politics and most people to be so far from our own beliefs that we felt we could not live in FL on a permanent basis. We intend to remain snowbirds and enjoy our home state in its own three glorious warmer seasons!

    by Zeech — November 28, 2011

  11. People please do not get burnt again. So please stay away from the sun belt states for at least the next 25 years. Do not make any decision in haste. Haste is waste.
    Patience is golden.
    So tread slowly and have a Merry Christmas!

    by Crazy Horse — December 10, 2011

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