Top Cities in Florida, Arkansas, Pennsylvania, Arizona, California, Oregon, New York
25 of 40 Retirement Hot Spots Post Increasing Prices, 27 With Positive Cap Rates
IRVINE, Calif. – July 4, 2013 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for real estate data, today released a special report on real estate investing in cities that are retirement hot spots — where at least one-third of the population is age 65 or older.
“These popular retirement cities will very likely be an area of growth in the housing market over the next 15 years as baby boomers retire in greater numbers,” said Daren Blomquist, vice president at RealtyTrac. “The baby boomer generation started retiring in 2011, a trend that will continue at least through 2029, ensuring plenty of demand for both rentals and owner-occupant purchases in these markets for the foreseeable future.”
The report found 40 cities nationwide with at least 33 percent of the population age 65 or older. Among these 40 cities, 25 posted annual increases in median home prices, and 27 had a positive capitalization rate — which indicates rentals in those markets generate positive cash flow. RealtyTrac also included relevant data on cost of living, average temperature and annual chance of sunshine in each of these markets.
RealtyTrac ranked the top 15 of the 40 retirement hot spot cities based on the annual percent change in home prices as of May. Topping the list was the central Florida town of Dunnellon, where 38 percent of the population is retirement age or older and home prices jumped more than 31 percent in the past year. The estimated cap rate in Dunnellon is more than 10 percent based on the average rent for a three-bedroom home there.
Six other Florida cities made the top 15 list: Naples, North Fort Myers, Punta Gorda, Sun City Center, Venice, and Orange City. Arizona and California each contributed two cities to the list, and Arkansas, Pennsylvania, Oregon and New York each had one city in the top 15.
"The Hamptons will continue to grow into a retirement hot spot on Long Island, offering an attractive environment for seniors,” said Emmett Laffey, CEO at Laffey Fine Homes International, which covers Long Island and the five New York boroughs. "Developers’ appetite to construct housing aimed towards retirement-aged adults is growing again. They are well aware that this buyer pool will only increase over the next 15 years.”
10 Tips for buying real estate with IRAs and other retirement accounts
As a supplement to the report, RealtyTrac is also providing the 10 tips on buying real estate with self-directed IRAs and other retirement accounts from a variety of experts.
“Given the combination of bottomed-out home prices and a still-tight lending environment, utilizing funds from a retirement account to purchase investment homes with cash, or at least with a large down payment, can give individual buyers a better chance of competing in this tight housing market,” Blomquist noted. “Provided the investments are made with thorough research beforehand, this investing strategy also gives consumers a path to more quickly build their nest egg since all proceeds from the real estate investment — whether that be from rental cash flow or from selling the property — go directly back into the retirement account.”
See the 10 Tips.