Dwelling Values in These 9 Retirement Cities Might Quickly Drop, In line with Actual Property Brokers
Housing has become increasingly expensive over the years. The median sales price of homes in the U.S. was $412,300 in the second quarter of 2024 compared to $288,000 in the second quarter of 2014, according to the Federal Reserve Bank of St. Louis. That’s over a $124,000 increase.
Find Out: 8 Places Where Houses Are Suddenly Major Bargains
Read Next: Become a Real Estate Investor for Just $1K Using This Bezos-Backed Startup
For those who are thinking about retiring and don’t want to rent or live with family, homeownership is the only real remaining option. But buying a new home in retirement can be quite the financial challenge, especially in places where housing is notoriously expensive.
The good news is that home values do fluctuate. GOBankingRates spoke with several real estate agents to find out in which retirement towns they believe prices will go down in the near future.
Wealthy people know the best money secrets. Learn how to copy them.
The Villages, Florida
The Villages is one location where housing prices have already seen a minor dip and could continue to do so.
“The town’s fast growth rate and overdevelopment have raised questions about the durability of infrastructure,” said Johnny Austin, a licensed real estate agent and founder of Sell My House Now, LLC. “Market saturation and infrastructure strain are warning signs.”
Learn More: 6 Best Cities To Buy Property in the Next 5 Years, According to Real Estate Agents
San Francisco
San Francisco has never exactly been affordable, but for retirees who want to live on the coast, it’s got definite appeal. The problem is housing prices are way up — though this could change.
“San Francisco has been experiencing a housing market boom for years, with record-breaking home prices and high buyer demand,” said Josh Dotoli, principal of Dotoli Group and director of luxury sales at Compass Florida. “However, in recent months, there has been a noticeable decline in the number of homes sold and an increase in inventory levels.”
There are many possible reasons why home values could decline in San Francisco, Dotoli said. One is COVID-19’s long-term impact on the economy and job market — specifically how it’s made it harder for people to afford high-priced homes. Another is that many companies in the area have shifted to remote work policies — this might not impact retirees directly, but it could bring home prices down.
Seattle
Rinal Patel, a real estate agent and founder of We Buy Philly Home, had a few predictions for where home values could come down. One of these is Seattle.
“Due to the city’s robust IT sector, housing values have skyrocketed and bidding wars are now frequent occurrences,” she said. “But since the pandemic has made it easier for tech workers to work remotely, many of them are searching for more affordable areas outside of Seattle. In the near future, property values are probably going to decline as a result of this decline in demand.”
Naples, Florida
More than 6.3 million people over 60 reside in Florida, according to SmartAsset. But some experts think places like Naples could see a drop in home values.
“Naples, Florida, is one retirement town that’s been heavily overbuilt and is now suffering from a glut of properties, especially as rising insurance costs push people inland or out of the state all together,” said Martin Orefice, a real estate agent and CEO of Rent to Own Labs.
Austin, Texas
Home values in Austin have already started to drop. Depending on the economy, this could continue to be the case.
“Similar to the other cities on our list, Austin’s thriving IT sector has brought in a large number of people and driven up housing costs,” Patel said.
Given the state of the economy — and an increase in remote work — people may start to look elsewhere for more affordable homes, causing prices to fall.
Sun City, Arizona
Although home values have gone up incrementally over the past year, Austin believes they will soon drop in Sun City.
“Considering Sun City’s aging infrastructure and limited appeal to younger retirees, there could be value declines within the historic retirement community,” he said. “The majority of the homes were constructed during 1960s and 1970s, thus generally requiring significant remodeling. It can’t compete with newer, more modern retirement communities.”
There’s also the concern of environmental conditions — specifically the ongoing drought. If these continue, Austin predicts there will be sustainability issues and a dip in housing prices.
Tucson, Arizona
Like other places in Arizona, Tucson is suffering from many of the same problems — including water supply issues. For retirees who don’t mind a bit of desert living and are willing to wait, Tucson could be another option.
“Tucson, Arizona, is simply running out of space to expand, and also running out of water, threatening long-term home values,” Orefice said.
New York
In New York, home values have only gone up by about 0.4% over the past year, meaning they’ve stayed relatively stable. But Patel believes they could soon drop, primarily due to the increase in remote work.
“Since working remotely is increasingly common, many people are looking outside of New York City,” she said.
This could eventually cause demand to shrink and home values to drop.
Corpus Christi, Texas
Home values in Corpus Christi have remained relatively stable over the past couple of years, but they could soon fall because of climate risks and other concerns.
“This market is risky due to hurricane risk and flooding as well as fluctuating oil prices,” Austin said. “In addition, because the local economy relies heavily on oil production it can cause significant volatility in the market leading to the direct impact on property values.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Home Values in These 9 Retirement Towns Could Soon Drop, According to Real Estate Agents
