The number-one rule in real estate is location, location, location, but that means different things to different people. For young families, the most desirable location is typically a neighborhood that’s near good schools and kid-friendly parks and (ideally) isn’t far from work. Retirees have different criteria. Their perfect destination is more likely to offer good health care facilities, be close to family and friends, and have a reasonable cost of living—particularly when it comes to home prices.
That last item is a tall order these days, with home prices up nearly 16% in the first quarter of 2022 compared with a year ago. While rising mortgage rates have slowed sales somewhat, a paltry inventory of homes for sale is likely to keep prices elevated for the foreseeable future.
But again, it’s all about location. In some parts of the country, home prices are well below the national median of $368,200—a nice bonus for seniors who are downsizing from a high-cost part of the country. And moving to a lower-cost area doesn’t mean giving up a great quality of life. Our seven cities offer access to high-quality health care, abundant outdoor activities and lively downtowns. Three are college towns, which means that when you’re not exploring local hiking and biking trails (or skiing, because not everyone hates winter), you’ll have plenty of opportunities to keep your mind sharp, too.
Surveys have shown that the primary reason retirees move is to be closer to family, so we cast a wide net and looked for a city in seven out of the nine U.S. Census divisions. Finding affordable destinations on both coasts was a challenge, but we’ve located attractive cities for retirees who have family in California or New England.
Although our destinations are small or medium-size cities, most provide easy day trips to major metropolitan areas. For example, from Scranton, Pa., where you can find a spacious home for about $150,000, you can get to New York City in less than three hours.
In the past, we’ve tried to limit our selections to cities in states that are rated as tax-friendly or neutral by Kiplinger’s State-by-State Guide to Taxes on Retirees. This year, we included some cities in states with above-average taxes, because taxes are just one factor retirees consider when selecting a place to live. For example, you may be willing to shoulder a higher state tax bill to live closer to adult children and grandchildren. In addition, states across the U.S.—both red and blue—are lowering taxes in response to post-pandemic budget surpluses.
Note that figures for living costs are based on the Council for Community and Economic Research’s Cost of Living Index. …….