Retirement: Are Seniors Forsaking Florida?

With its beautiful beaches, low taxes, and great golf courses, Florida used to pull retirees in by the millions. Now real-estate prices have collapsed and unemployment has skyrocketed. Some retirees are returning to points north, and a new generation is not intent on repopulating the Sunshine State.

"Florida has definitely lost its edge," says William Haas, a sociology professor at the University of North Carolina at Asheville, who has studied retiree migration in the U.S. He points to a slew of reasons, including the horrible hurricane season of 2004–2005 and rising property taxes and insurance rates, for why Florida is no longer such a draw, and he has the figures to prove it. In the peak year of 1980, 26.3 percent of all U.S. citizens 60 and older who moved went to Florida; in 2007, it was less than half that. The numbers of people who did move to the state barely replaced the number of older people who left. This year, Florida's population problem is getting worse. Between April 2008 and April 2009, the state actually lost population for the first time in more than 100 years (excluding periods during the world wars, when troops stationed there skewed the population figures), reports the University of Florida.

State boosters like Mark Wilson, president of the Florida's Chamber of Commerce, say that while many retirees may want to flock to Florida, they can't afford to partly because they can't sell their homes up North. It doesn't help, he says, that the state has gone from being the fifth least-expensive in the country (back in the 1980s) to the 14th most expensive. Folded into the costs of Florida living are rising home-insurance premiums. In some areas, rates doubled in the aftermath of the 2004–2005 hurricanes. Property taxes have been rising across the state, too, as local government enact increases to make up for their budgetary shortfalls.

Experts who monitor retirees and their lifestyle choices say it isn't just a matter of Florida getting pricier, but of a new generation of aging Americans having more choices and different tastes. "People have a lot more options than just going to Florida. Many new retirement communities have been built in Maryland, Delaware, the Carolinas, and Georgia," reports E. Thomas Wetzel, president of the Retirement Living Information Center. "There's even a group of retirees called halfbacks, who went to Florida, didn't like it, came halfway back and settled in Georgia, North Carolina, Tennessee, and Kentucky, where they get four seasons."

"A new generation of retirees is not necessarily looking just for fun in the sun," says Mary Lu Abbott, of Where to Retire magazine. "More [people] are choosing suburban-exurban areas and smaller cities around big cities, often where there are universities to liven the social and cultural scene." New retirees are choosing smaller towns and cities in areas with comfortable but four-season climates, she says. Among the places she's noted as newly popular are the Raleigh-Durham area of North Carolina and around Atlanta and Austin, Texas.

Then there's also the no-retirement model. Most working baby boomers have deferred, perhaps indefinitely, their retirement plans in the wake of the stock market and 401(k) losses over the past two years. Even when they do retire, they are more likely to stay in their existing houses and neighborhoods, where they are more "tethered" by mortgages, families, and ongoing jobs than previous generations, says Nicolas Retsinas of Harvard University's Joint Center for Housing Studies. "There's probably going to be a waning of migration."

But don't rule out Florida altogether. Despite its dwindling population, it still draws more sheer numbers of retirees than any other single state. And for those who can afford the new higher insurance and property-tax rates, there are real-estate bargains to be had. The median condo price in August was $107,500, a 46 percent drop from its August 2007 level, according to the Florida Association of Realtors. Of course, the state still has sunny weather and beaches going for it. While it may eventually cease to be the nation's retirement destination, it's still Florida.