Is the Sun Belt Really all that?

Retirees still tend to flock to the sunny and warm parts of the country. Most of those areas are so nice in the wintertime, but many are unbearable in the summer. Retirees with enough money to have two houses often spend winters in Arizona and return to a northern climate area in the summer. For people looking to live in one place all year round the decision to ditch winter weather can be very uncomfortable in the summer. 

The annual United Van Lines moving report shows the following states had the highest percentage of inbound moves with retirement stated as the reason for the move.

1. Florida (39%)
2. South Carolina (37%)
3. Arizona (36%)
4. Delaware (34%)
5. Idaho (29%)
6. Nevada (29%)
7. Wyoming (28%)
8. Mississippi (28%)
9. New Mexico (27%)
10. Maine (27%)

For several years Washington State was the number one state to retire to in the northern latitudes but one can see that Maine, Idaho, Delaware, and Wyoming are ahead of Washington which failed to make the top ten for the first time in quite awhile. Washington's popularity has waned a bit most likely due to the high cost of real estate. The median home price in Washington State is significantly higher than any of the state on this top ten list. It should be noted that this particular list is a percentage and Washington still gets a high volume of retirees but we are also getting a lot of young professionals moving here and that waters down the percentage a bit. 

Here in the west, Arizona is the King Kahuna of retirement spots. They have reasonable priced real estate, but it is rising a bit, they have decent low taxes, and they are undoubtedly warm. I could not live in Arizona year round. I would rather freeze in the North Dakota winter than burn in the Arizona summer. Phoenix Arizona averages 110 days per year at or above 100º and nearly as many nights that failed to drop below 90º. Vancouver, Washington on average has... wait for it... ZERO days above 100º. Now before people freak out and point out each time the century mark was pierce I wrote "on average". A typical year produces about 0.4 100 degree days on average. I have recorded a few summers that had 3 or 4 and I once went 4 years in a row without recording one. 

For retirees trying to avoid the deep chill and heavy snow shoveling, Western Washington is the place. Snowfall is fairly light in most places West of the Cascades at lower elevations between sea level and 500 feet. It does get a bit drippy but the temperatures are comfortably mild 95% of the year.

Washington State remains an excellent place to retiree with no state income tax and mild weather in most areas. What are you waiting for?

Vancouver's Urban Retirement Community Under Construction

Workers on Vancouver's wonderful waterfront have been busy the last few months excavating the site of the massive Springs Living High Rise community on Block 18. The 12 story building will cover nearly all of the 1.29 acre site and feature three levels of subterranean parking. The excavation is more than 30 feet deep at this point. 

Retirees looking for the city living opportunity with all the creature comforts of a full service retirement community should look no further than the Springs Living at the Waterfront. The project should complete sometime in 2024. According to the Springs website the facility will provide independent living as well as assisted living and memory care. Its location right on the mighty Columbia will provide residents with breathtaking views of the river as well as city skyline views of Vancouver and the Waterfront.

The location has quickly become the premier Waterfront location int he entire Metro Area. A fabulous waterfront park and pier are just a short stroll out the front door. There are scores and scores of restaurants, tap rooms, wineries and more all within walking distance.

I would expect many Portlanders interested in city retirement living to flock to this as Washington's favorable tax situation will pad their wallets for years to come. The Springs is just one of many reasons to retire to Washington State.

With Inflation eating away Retirement, Income Tax is a Killer

Once again the ugly monster of retirement is taxes and income taxes tend to chew up net income. When coupled with the worst inflation since the Carter Administration, retirees should be real careful when choosing a new destination. 

Washington State continues to have no income tax or gains taxations. For retirees pulling income from investments or pensions, the lack of an income tax takes away some of the inflation pain. Income taxes are a bit hidden as they are typically taken out of income checks as payroll deductions. The net check is noticeably smaller than the gross check. Sales taxes are visible, right up in your face every time you buy something. This is why I refer to income taxes as a hidden killer.

Our state neighbor to the south has one of the most aggressive income taxes in the nation. Although Oregon's top bracket is not as brutal as states like California, New Jersey, and New York, it starts the 8.75% bracket at income as low as $9200 a year. Yikes! Income taxes tend to negatively effect savings rates. Since less money is available at the time of receiving income it can be difficult for saving. One can always cut back on expenses to save sales tax, but when your income is being eaten before you receive it, that's impossible to overcome.

During these inflationary times, Washington State again looks attractive for potential retirees. Especially when contrasted with Northwest Oregon.

Sunny Washington?

Well, sort of. Central Washington is home to the sunniest cities in the state with Ellensburg on top at 204 sunny days per year on average. The home of Central Washington State University, my son's alma matter is the only city in Washington to yield over 200 sun shiny days per year. Yakima, Walla, and the Tri-Cities round out the top six spots averaging roughly 185-195 days per year with the flaming orb dominating skies. These cities east of the mighty Cascades charge a bit of a fee for this sunnyliciousness. Winters are a bit colder and in Ellensburg they can be downright frigid. The best compromise is the Trip-Cities and Walla Walla which are a bit hot in the summer but not as bitter cold in the winter.

On the western side of the state it is slim Pickens with just two locations in the top ten. Friday Harbor and Sequim. These two will give you almost half your days on the sunny side of life and offer mild temperatures all year long. Both of these towns are sheltered from heavy Pacific storms by the rain shadow effect created from the leeward side of the Olympic Mountains.

So who says you can't have sunny days in Washington state? If you want a great four season climate with about as much sunshine as you'll find in 90% of the country, Ellensburg is your best bet in the Evergreen State.

Market trends in Clark County suggest a soft landing.

This article was published, Friday, June 24, 2022 on Rod's Real Estate News:

Our current condition of uncertainty in the economy is seemingly making sellers a bit less confident in pricing and marketing time. Buyers have been in short supply for quite a few months but low inventory levels made the market seem more robust than it was. As more and more sellers sense the top of the market more listings are pouring into the system. It will take a fair while for inventory levels to return to a more "normal" level of 3-5 months supply, but in the mean time, buyers may feel some of that market pressure ease a bit as we move through the summer months. Hopefully the Fed will let the latest rate hikes percolate in the economy for at least 3-6 months before pulling the panic lever and raising them more.

I suspect we will have a decent summer of sales and as the autumn approaches later this year, we may see a genuine softening in prices as inventory levels likely continue to rise. I am finding more and more of my clients are calling me for listing appointments. If that admittedly anecdotal evidence is is true across the board and several of my colleagues are feeling it too, then market neutrality is nearby.

Keep in mind that historically a deathly real estate Markey is a neutral market and in our Clark County market, 700-800 monthly home sales is solid business we are well above that right now.

Washington is #1 in America Yet Again

Every year US News and World Report ranks all 50 states and DC to choose the best state in America to live. For the third straight year Washington State is once again ranked number one as of an issue published a few months back. Although retirement rankings can be rated differently than general rankings being the very best state to live in is beneficial whether you are young or old, retired or working. They used a wide variety of metrics to come up with a score but driving Washington's success was schools #4 in the US, economy #4 in the US, healthcare #8 in the US, infrastructure #3 in the US, as well as most metrics aside from housing expenses where Washington performs terribly at #4 most expensive. Of course housing tends to cost more in the best state in America, seems legit.

Healthcare is a big deal for retirees and that bodes well for our state with some of the best in the nation. One thing that is very important to some retirees is being close to grand children. Washington state is attracting families from other areas with its roaring economy and high paying jobs. Retirees still benefit from Washington's lack of an income tax and provisions for lower income seniors on property taxes and healthcare. 

Maybe it's time to take another look at the Evergreen State before you move to the sunny south :)

Source US News and World Report

Inflation is a real risk

The inflation problem is certainly not temporary as politicians and 'yes-men' economists suggested last year. For those retiring on fixed income benefits from savings or IRAs, this eats quickly into principal capital and can shorten the length at which funds will last. For pension earners the inflation is rising faster than COLA increases and that can feel even worse on the wallet.

Real estate remains a solid investment with double digit gains that will continue so long as the inflation does. But alas, the FED is trying to reign it in with rate increases. As this monetary squeeze developed over the next several months housing may finally slow down as buyers will struggle to qualify for loans.

Retirees selling a larger family home and downsizing still hold an advantage as often they are paying all cash or have an enormous downpayment which always makes sellers smile. 

Those nearing retirement should absolutely reach out to your CPA or Financial Planner to see if working and extra year or two can offset this horrendous inflation. It is wise to consider these things as once you retire it can be very difficult to un-retire.

Washington State has no income tax and that allows you to keep more of your money so bear that in mind before moving to some tax heavy state just because they have a little more sunshine ;)