Dismal Economy Cools Growth Of Retirement Hot Spots
The abysmal housing market is making it difficult for retirees to fulfill their dreams of moving to the sun belt.
That's bad news for destinations like Tucson, Albuquerque and Flagstaff, which benefit economically from the arrival of the newly retired.
In New Mexico, Las Cruces is increasingly becoming a retirement hot spot, thanks to its small town feel. The city has a population of about 100,000, which makes for light traffic on the two interstates that bisect the city. Those are the two main reasons that convinced Tom and Cheryl Hanrahan to make it their post professional haven.
The couple moved to Las Cruces four years ago. They live in a southwest style home built in a new housing development called Sonoma Ranch. Their backyard view features the jagged peaks of the of the Organ mountains.
“We have happy hour on our patio every night and watch the mountain change,” Cheryl Hanrahan said.
Before they could move to Las Cruces, the Hanrahans had to sell their farmhouse in rural Pennsylvania. They put the house up for sale in 2006, right at the beginning of the housing crisis.
“It was on the market for at least one year,” Cheryl Hanrahan said. “We didn't want two mortgages again.”
Many retirees are faced with the same challenge, according to Walter Maloney, a spokesman for the National Association of Realtors.
Maloney cites census data that found the movement of people over age 65 from one state to another has declined by 26 percent since 2006. During the same period, home prices have declined by up to 30 percent by some estimates. In areas like the midwest and east coast it can take two or more years to sell a house. Some retirees simply give up and stay put.
Despite the bad market, developers like Bob Pofahl know that southwest is a magnet for retirees looking to escape the cold weather up north and hurricanes along the east coast. Pofahl is currently building homes in an upscale development on a desert hillside overlooking Las Cruces.
“We have had the same amount of traffic and interest. It just takes longer for the people to close,” he said. “And obviously it's because they need to sell a home somewhere else or they are just waiting to see the economy stabilize.”
For cities like Las Cruces, retirees are an economic boon. They contribute more to the local economy than just equity and spending money. Many open businesses like restaurants and cafes and volunteer at non-profits, libraries, and government agencies. Some, like 67-year-old Bill McCamey, put a lifetime of professional expertise to good use locally.
McAimey worked in movies for 30 years, blowing up stuff for special effects departments. He moved to Las Cruces before the housing crisis and uses his extensive contacts in the industry to bring film producers to the area.
“We've brought in films and we've had approximately 3 million dollars that's been put into the community,” he said. “We've had a road built by a production company which is something the city had not planned on paving for quite a while.”
Joel Courtney at the Las Cruces Chamber of Commerce certainly notices the slow down in the arrival of people like McCamey.
“I don't know if it has hurt us, but certainly it's slowed our recovery,” he said. “I mean we would have more income and more people willing to move to Las Cruces if they could get out from under their homes where they are at.”
And the future doesn't look much better. With the economy facing a double dip recession, analysts predict home prices will fall further along with sales.