Happy Holidays!

Well Christmas is just three days away! Perhaps the best present in 2020 is a plan to move to Washington State in 2021. In particular SW Washington which offers everything from the beach to the mountains. There is a broad range of housing costs across the region with rural counties offering median home prices below the national average and urban areas costing well above the national average. SW Washington truly has something for everyone. Well no desert life, but central Washington has all the desert you could ever want :)

Although some say Olympia is part of SW Washington it has really become an extension of the greater Seattle-Tacoma Metro area. The counties that comprise the area are Pacific, Lewis, Wahkiakum, Cowlitz, Clark, and Skamania counties. 

This portion of Washington State offers a wide variety of topography and demographic variance. Everything from the urban jungle to the backwoods to the beach. Below is an outline of the counties and some facts about each.

Clark County

• Median home price $414,000
• Median income $67,300
• Median age 37
• Population 500,000
• Population Density 750/square mile
• Largest city, Vancouver 200,000 (340,000)
• Seat of government, Vancouver
• Highest point, Sturgeon Rock 4,080 ft (Silver Star 4,364 ft)
• Lowest point, Columbia River @25 ft
• 2nd city, Camas 23,000
• 3rd city, Battle Ground, 20,000
• 4th city, Washougal, 15,000
• 5th city, Ridgefield, 8,000
• 6th city, La Center 4,000
• 7th city (township), Yacolt, 1,800
• Notable #1 Oldest county in Washington
• Notable #2 Bounded on south and west by Columbia River
• Notable #3 Third largest seaport in Washington
• Notable #4 Second most densely populated county in Washington

Cowlitz County

• Median home price $321,000
• Median income $55,000
• Median age 40
• Population 112,000
• Population Density 91/square mile
• Largest City, Longview 40,000
• Seat of government, Kelso
• Highest point, Goat Mountain 4,965 ft
• Lowest point, Columbia River @25 ft
• 2nd city, Kelso 13,000
• 3rd city, Woodland, 5,700
• 4th city, Kalama, 3,000
• 5th city, Castle Rock, 2,400
• Notable #1 4th largest seaport in Washington
• Notable #2 Contains a portion of the St Helens NVM

Skamania County

• Median home price $376,000
• Median income $61,540
• Median age 44
• Population 12,500
• Population Density 7/square mile
• Largest City, Stevenson 1,750
• Seat of government, Stevenson
• Highest point, West Slope Mt. Adams , 8,920 ft (Mt Adams 12,245 ft)
• Lowest point, Columbia River @25 ft
• 2nd city, North Bonneville 1,000
• Notable #1 Beacon Rock 2nd largest rock monolith in the world
• Notable #2 Mount St. Helens 8,366 ft
• Notable #3 Bonneville Dam

Lewis County

• Median home price $296,000
• Median income $53,358
• Median age 42
• Population 82,000
• Population Density 33/square mile
• Largest City, Centralia 18,000
• Seat of government, Chehalis
• Highest point, Big Horn, 8,000 ft 
• Lowest point, Cowlitz River @55 ft
• 2nd city, Chehalis 7,700
• 3rd city, Napavine 2,000
• 4th city, Winlock 1,500 
• 5th city, Morton 1,200
• 6th city, Mossy Rock 900
• 7th city, Toledo 770
• 8th city, Vader 670
• Notable #1 Midway between Portland, OR and Seattle, WA
• Notable #2 Portions of Rainer National Park

Wahkiakum County

• Median home price $458,000
• Median income $47,260
• Median age 52
• Population 4,600
• Population Density 25/square mile
• Largest City (township), Cathlamet 600
• Seat of government, Cathlamet
• Highest point, Huckleberry Ridge , 2,673 ft 
• Lowest point, Columbia River @20 ft
• Notable #1 Named for prominent Chinook Indian Chief
• Notable #2 Smallest land area of any non island county in Washington
• Notable #3 2nd lowest county population in Washington

Pacific County

• Median home price $210,259
• Median income $51,450
• Median age 51
• Population 23,000
• Population Density 22/square mile
• Largest City, Raymond 3,000
• Seat of government, South Bend
• Highest point, unnamed peak in Willapa Hills, 3,020 ft 
• Lowest point, Pacific Ocean 0 ft
• 2nd city, South Bend 1,700
• 3rd city, Long Beach 1,500
• 4th city, Ilwaco 1,000
• Notable #1 Mouth of the Columbia River
• Notable #2 Long Beach, drive on beach is actually a state highway

2021 Brings Potential Change

 Although Washington State appears to be on track for a continuance of recent policy, the national scene will likely change in 2021 with a new President and a much tighter Congress. Democrats barely hung on to the house and Republicans lost a couple Senate seats. This may lead to a gridlock scenario but should the Democrats manage to snag the Senate (It is possible with two Georgia run-offs in January), things could look a lot different. For middle to upper income retirees, Washington may look even better financially since Joe Biden has indicated an intention to reverse the 2017 tax plan. Living in a state with income tax and paying even more federal tax could lead some retirees to choke on their tax bill. Washington of course, has no state income tax.

Washington State continues to be the northern state best suited to upper middle income and higher income seniors as income tax punishes those with higher incomes. Those retirees with more modest incomes may not feel the pinch in 2021-22 as hard leading to more options for a clean getaway on their taxes. Nearby Idaho can look attractive for some, but Idaho's urban amenities are a touch lacking and the winters tend to be a bit chillier than ours.

For many, Washington State is getting too expensive. Our state is now ranked 4th in the nation for median home price with Seattle leading the way as the 3rd most expensive large city (500k residents city proper) in America, behind, San Francisco, CA and San Jose, CA.

But Washington has a great many areas whereby the housing costs are substantially lower than the statewide median. In fact, Vancouver, WA is the 4th largest city in the state and immediately adjacent to Portland, OR and the median home price is about $390k sitting under the statewide median of about $425k. Clark County, Washington for which Vancouver is the seat of government is at roughly the statewide median and offers the full range from high rise urban condos, to ranchettes and horse properties along with everything in between. 

2021 is just around the corner and hopefully it will be better than this crazy 2020 we are wrapping up.

Election 2020 is exactly one week away.

This year many states offered expedited mail in ballot options to help voters cope with COVID-19 concerns about voting in person. Although many experts say that voting in person is fine providing you follow the same guideline as you do elsewhere with social distancing and masks, the mail in option was rather popular this time round. 

Whether you vote by mail or in the 'booth" be sure to cast your vote from the top down. Don't forget about all those local election items, they are just as important as the top fed ticket. 

Meanwhile people looking for a spot to spend the 'golden years' Washington still offers a great deal to seniors and young retirees alike. We have excellent health care, low taxes for seniors, wonderful outdoors, and very mild weather for such a northerly locale.

Don't forget Washington is a no income tax state. I wrote about that last year in the following article:

Let's look at why an income tax is more of a killer than a sales tax especially for retirees. Retirees often do not have many tax deductions or exemptions. So a retired couple earning a taxable household income of 35,000 will pay about $3150 in Oregon State income tax. Contrast that with the a typical annual sales tax paid in Washington at $1200.

Sales tax is something you only pay when you buy a taxable item. In Washington food for example is not subject to sales tax. An income tax is levied before you receive your net check. You are going to pay it whether you buy things or not. Sales tax is almost always a lower expense than income tax with the notable exception of being poor. Those in Oregon who have a taxable income of $0 will not pay any income tax, obviously. But in Washington a person with a taxable income of $0 will still need to buy things and some of those things will be subject to sales tax.

Please take note I am using taxable income, because retirees are not subject to income taxes on a sizable portion of their Social Security, ROTH IRA's are tax free, and standard exemptions and deductions reduce taxable income. So someone earning $20,000 could in fact have a taxable income of $0.

So the rule of thumb is, if you are poor live, in Oregon, if you are middle or upper income, move to Washington. Well it isn't always quite that simple, but that simple solution is not to far from reality in actuality. 

Retiring in the COVID-19 Era

 COVID-19 is a serious concern for older people and generally those looking at retirement are in that "older" category. How does COVID effect soon to be retired people? Can you still move? Can you still buy a house?

Well the move part depends on your local state, but in Washington real estate is alive and well. There are so protocols we utilize when showing properties, but sales are quite brisk. in fact the real estate market is holding the economy together right now. 

Our market here in SW Washington is seeing pressure on housing from multiple fronts. Low interest rates are driving millennials to the market. Geo-Political and taxation issues are drive Oregonians, particularly from Portland to the area. And the mass exodus in California is also driving buyers our way.

Washington enjoys a robust and high quality healthcare industry as well as a variety of quality living communities for the retired set. COVID-19 hasn't made this area any less desirable for retirees, in fact it may be even more so with quality heath care, no income tax, and somewhat flexible COVID-19 government restrictions.

Washington continues to be a great place to retire and the strong real estate market means retirees can enjoy a rising equity position as more and more people flock to the state.

This month I am recycling an article from my Real Estate website that has some relevance to retirees considering Vancouver, USA.

Originally posted on Realtor Rod, 8/14/2020, by Rod Sager

High-rise condos

Vancouver, USA is a place that has one of the most diverse residential real estate markets in the entire region. The city proper lies on the shores of the mighty Columbia River where nearly 200,000 people reside within the incorporated boundary. But Vancouver also has another 140,000 or so people living in urban and suburban neighborhoods just outside the official "city." 

This can make for some interesting transitions between various neighborhoods that have developed over the decades at different paces and under different county guidelines for development. When venturing outside the incorporated boundaries of the city, neighborhoods will take on a variety of different characteristics ranging from near rural to urban densities. Outside of the incorporated city one may find neighborhoods with streets that transition from fully developed suburbia to rural open culvert and back again. This is very rare inside the incorporated city but somewhat common in unincorporated neighborhoods. This is not a problem per se but for those that like a conforming neighborhood the incorporated city is the best bet.

It is mostly in the unincorporated neighborhoods that one can find a suburban home on a large 1/2 acre or even 1 acre lot with a bit of a country feel yet still "in town" with close proximity to suburban amenities like schools and shopping. But these are also neighborhoods where one might notice some quasi rural effects such as livestock, roosters, and other traditional rural and farming type ambiance for better or worse.

Most cities have a variety of transitional areas but Vancouver has 140,000 people living in these unincorporated neighborhoods. Vancouver has more people living in the neighborhoods outside the city than live in any of Portland's suburban cities including Gresham, Beaverton, and Hillsboro. 

At some point over the next decade or so, the city will annex most of these areas and when that happens some conformity changes will occur which in general helps the overall aesthetic, but may cripple some of the charm. 

Rural 5 acres, in close to "town"

People moving in from out of the area are often taken by surprise at the "size" of Vancouver and that is likely because they expected a city the size of the Vancouver described on the Wikipedia page and found the Vancouver of reality which is nearly twice as big. Vancouver has a robust downtown that has become very urban over the last 25 years yet remains notably more navigable than Portland's busier urban core. One can find high-rise condos and waterfront apartments in modern walk-able and sustainable neighborhoods. Vancouver has a large area of vintage classic homes in Norman Rockwell type neighborhoods such as Arnada, Shumway, Hough and Carter Park. The city has a wide swath of neighborhoods with homes dating to every decade of the 20th century. Vancouver is like a time machine of sorts offering a glimpse of neighborhood life across the decades. 

For those that want a house on five acres with horses and such, Vancouver even has a fair bit of that to the east in the Proebstel area. Like the title says, it's an eclectic mix with something for everyone :)

Low Rates Driving Buyers to Market

Low interest rates are driving new buyers to the market all over the country. Although many retirees plan on a cash purchase, having entry level buyers competing for similar one level smaller homes can prove troublesome for the budget minded retiree. 

Although Washington is attractive to seniors and retirees with no income tax it is also popular among young people coming into the state for high paying jobs across a wide number of fields. The Tri-Cities and Vancouver remain popular for both retired and working people.

Retirees looking for that one level dream home may find themselves in competition with up and coming youngsters looking the jump into the is hot market with sub 3% mortgages available for solid borrowers. Retirees over the age of 55 can sometimes find communities design for older residents and may find less competition from working persons. But those communities are often sought after as well by the millions of aging boomers looking to downsize and slow the pace.

In any case retirees thinking about paying cash for a house may want to revisit the notion of a loan. Borrowing a few hundred grand at less than 3% is not a bad deal at all.   

Is SW Washington State the BEST non Sun Belt Location in America?

I say non Sun Belt because let's face it, seniors tend to retire in warmer locales. Washington State and warm weather are rarely in alignment. That said Washington State enjoys the most mild winter weather of any state above the 45th parallel. How does the Evergreen State compare against the top US States to retire in? According to Investopedia the most POPULAR states to retire in and According to Wallet hub the BEST to retire in.

Rank	Best	Most Popular	Rank Best List
1	Florida	New Mexico	49
2	Colorado	Florida	1
3	New Hampshire	Arizona	22
4	Utah	South Carolina	18
5	Wyoming	Idaho	9
6	Delaware	Maine	28
7	Virginia	Vermont	36
8	Wisconsin	Nevada	35
9	Idaho	Wyoming	5
10	Iowa	Montana	12

Notice that Washington State appears on NEITHER list. On the wallet hub list of "Best" places to retire Washington is crushed by it's Number 36 "affordable" ranking and that is driven largely by the atrociously expensive Seattle Metro Area housing costs.

The most popular list has some strange variance from the best list. Vermont is very popular for retirees yet ranks poorly on the best list which measure metrics important to retirees, like health care, weather, housing costs, taxes, etc.

This dynamic shows that some retirees ignore the ratings and go for other reasons, such as proximity to family, weather over all else, air travel corridors to visit family they may be leaving to retire, and so on. Why do so many North Easterners retire to Florida? Many reasons, it is a north south no-time zone flight between the Northeast and Florida. Florida is highly rated for retirees. It is a no brainer, really.

California is a state that is shedding retirees fast. Arizona and Nevada are no doubt popular choices for the exodus of California. Washington State enjoys a similar advantage to Florida for California retirees because of the short north-south flight corridor allowing for easy visits to family and friends left behind. Although California transplants are the #2 source of new residents to Washington State, Oregon remains #1 by a huge margin. Washington is an easy choice to make versus Oregon for retirees. In fact when housing costs are taken out of the equation, Washington State routinely ranks in the top 10 states in America to retire. The beautiful thing about Southwest Washington is that housing costs locally are less than HALF that of Seattle.

Southwest Washington State is regionally superior to Washington State offering all of the Evergreen State benefits without the glaring disadvantage on housing costs. Overall when separating this local area out from the rest of the state, SW Washington would easily land in the top ten best list.

Let's do a scale of 1-10 in Clark County, Washington for retirees compared to other West Coast locales, click on the chart to enlarge.



This area continues to be a large draw from West Coast retirees in Oregon and California, be it chasing the kids to better opportunities in retirement, Washington State outside of Seattle is still one the best places in America to retire.

COVID-19 Slowing Down but not Halting Construction

Several fantastic senior living projects are in a variety of phases right now in Vancouver. The progress on some of the projects actively under construction was slowed significantly for a couple of months when the Corona Virus pandemic first hit. Now crews are back on the job and most are running at at least 60% capacity.

A few projects that are still in the planning phases may also be a bit delayed but that process is going to start picking up as well. Any people that are further along the road of retirement and may be looking for living arrangements that allow you to age in place, may need to sit tight an extra couple of months should a newer facility be to your liking.

There is a great deal of construction and planning in the senior living space her in Clark County, Washington. Washington remains a great place to retire and may be the best four-season retirement state in the USA.

I mentioned in a prior post that The Springs Living is planning on building their first high-rise property on Vancouver's Waterfront. The Block 18 proposal is working its way through the planning phases. So long as the Springs has their funding in place that project should be shovel ready in less than six months. The City of Vancouver has master-planned that entire 21 block waterfront as an urban community. The Springs proposal at 12 stories meets the minimum density requirement and should have no issue with FAA height regulations for the nearby PDX and Pearson airports. I am actually very excited about the Springs project it looks fantastic and will give local retirees a modern urban living experience on the majestic Columbia River.

Affinity at Vancouver is wrapping up their large 170 unit project in Orchards near the SR-500 & I-205 interchange. This more suburban project is close to shopping and services as well as major highways.

Overall things are looking up for retirees in Southwest Washington state even as the COVID-19 restrictions continue, projects continue to progress as well.

Retirees Continue to Pick Washington

Washington State continues to attract retirees more often than any northern state in the US. The lack of a state income tax and breath taking scenery are all part of the allure. This has brought a fair bit of retirement community development to the state. Washington State offers that rare four season climate without the bitter cold winters found in most northern locales.

The Springs Living, an Oregon based upscale and full service retirement community developer submitted a pre-app package to the City of Vancouver, WA for a fabulous high rise project on the gorgeous Vancouver Waterfront. this project will feature 200 units from independent living to assisted living, and memory care.

Shea Homes, the developer of the popular Trilogy retirement resort style communities has four communities in Washington State which is as many as most of the sun belt states. Three of the Washington sites are long since sold out. The newest development, Trilogy at Bonny Lake still has new homes available.

Washington is the ultimate northern locale for retirees and the robust economy means your kids and grand-kids may already be here waiting for you!

Healthcare in the spotlight, with COVID-19 about

Retirees considering a move to the Evergreen State can rest assured that the health care system is in great shape. US News and World Report ranked all fifty US states for overall healthcare and Washington State was #4 and is the only no-income tax state in the top 10 and the best overall tax state among the leaders in healthcare.

Retirees tend to have concerns on healthcare and Washington State remains the best northern state int he nation for retirees and one of the best overall edging out many sun-belt locales for overall retirement living.

Washington has been hit hard by the Corona Virus but our system is handling the case load, and working through this trying time as well as can be expected for such a significant health event.

Since this site is focused on retirees, it should be noted that retirees are much more at risk to have a serious health issue from COVID 19 than younger people. Follow the direction of your local health officials and be mindful that this disease can and will kill older people and people with underlying health issues.

Be healthy, be strong, and retire to Washington State.

Eastern Washington versus Western Washington

Washington State is commonly divided into east and west with the mighty Cascade range the defacto line of separation. The state is divided a bit politically as well as climatically along this geographic 'border'. Things do tend to be a bit more conservative on the right side of the Cascades and lean a bit more liberal on the left side.

The climate is a bit differing factor. Where the east side enjoys more sunshine and significantly less rainfall, it also has a much more severe extreme in both the winter and summer months. It get genuinely cold on the east side in the winter. Not quite as bad as say North Dakota, but close you know, like South Dakota ;) Sub zero temps are no stranger to cities like Ellensburg, Pullman, and the inland capital, Spokane. There will also be substantially more snowfall on the eastern side at lower elevations all the way down to sea level. (well 400 feet at least). The eastern two thirds of Washington State is a trade off for hot weather int he summer and cold weather in the winter versus a much more mild range on the west side. The west side will bring rain and some rain, and then after that a bit more rain. But wintertime temps are not likely to stay below freezing for more a than few days at a time and it is very rare to see temps in the single digits and rarer still for sub-zero. Snowfall below 1500 feet tends to be infrequent and short lived, usually. Summers are gloriously mild with dry warm weather that rarely gets hot.

8 out of the 10 largest Washington cities are on the west side. Spokane the lone "big city" east of the cascades is however the 2nd largest city in the state (for now, Vancouver, WA is likely to eclipse it soon). Spokane Valley ranks 10th. Urban dwellers will be a bit disappointed in the eastern 2/3 of the state.

Washington offers a little bit of everything and the whole state remains free of income tax which is the bane of retirees across the land.

With New Taxes, Is Paying Cash Better?

Since the federal government passed the most recent tax package in 2017 some retirees may no longer benefit from carrying mortgage debt. Retirees often have very little to itemize other than a mortgage and the new standard deduction is a whopping $24,000 for a married couple. With interest rates near all time lows it takes a pretty big mortgage to produce interest payments over $24,000 in a year.

Paying cash for a property could lead to a better and stronger position later on. A reverse mortgage could be used later in life should cash flow in the future be impeded by natural inflation or an unforeseen financial event.

Paying cash could also open the door to places like condominiums or manufactured homes in senior parks. With no mortgage payments the HOA or park fees are likely to be easily covered with the retirees fixed income payments.

Mortgages can free up capital that may be invested elsewhere at a higher rate of return, but retirees should be mindful that risky investments are unwise in the latter third of life.

Mortgage free living allows the retiree to spend less of the fixed income each month which can help preserve assets in 401k or IRA accounts. For fixed pensions it allows for more monthly spending or to build up a solid savings account. As mentioned earlier, a free and clear house also allows the retiree to utilize a reverse mortgage to increase income later in life should the resources in the 401k or IRA run low or if the pension begins to lose ground against inflationary conditions.

As always when I write about investments and taxes I encourage people to consult with licensed professionals in the investment industry and a professional tax accountant before making decisions based on information in articles lie these. Everyone has different and often unique financial needs and conditions that ought to analyzed by an appropriate professional.