This article covers the best and worst states for homebuyers and retirees.
More and more individual taxpayers are crossing state lines and moving to lower-taxed states where the cost of living is lower and has affordable housing. Many high-taxed states such as Illinois, New York, and California are losing individual taxpayers and businesses to lower-taxed states like Florida, Texas, and Georgia. In this article, we will discuss the best and the worst states for homebuyers and retirees.
High Taxes Are Causing Mass Exodus of Taxpayers
There are many states like New York where retirees are fleeing to other states with low taxes. New York residents are leaving the state in record numbers. Over 1.4 million residents left New York to other states due to the high taxes. Every type of tax is high in New York. Sales taxes, income taxes, property taxes, and other taxes.
The state is short $2 billion in revenues due to both residents and businesses leaving the state. Out of the best and worst states for home buyers and retirees, New York leads the first place position in the worst place for home buyers and retirees.
Taxes Drive Relocation Decisions
If you are not paying attention to property taxes when looking for a place to retire, you should. There are many states with high property taxes that some retirees have a difficult time affording. And while states like California protect long-time homeowners from huge property tax increases, as a new buyer, you pay the going rate.
And it’s no just property taxes. The total tax burden imposed by a state includes sales taxes, gas and road taxes, income taxes and more. It makes sense to compare the total taxes that will affect you and choose a state that is affordable to you.
If you have a lot of savings but less income for instance, income taxes might not be as critical to you as sales or property taxes. But if you’re a high earner who rents, your priorities will be different.
And taxes are no the only consideration — affordability, safety, and livability are all factors to consider when choosing a retirement destination.
Best and Worst States for Home Buyers
Florida used to be the best place for retirees, and it’s still a popular destination. The state has no state income taxes. Property taxes are low.
However, home prices in Florida have been increasing double digits for the past three years. There is more demand for housing than inventory. A home that cost $230,000 in 2012 is now worth $350,000 in many parts of Florida. Even though home values have appreciated substantially, prices are still lower than they are in states like New York, New Jersey, Connecticut, California, and Colorado.
The Most Popular State for New Residents
According to a recent report from BankRate, the best state for retirees to purchase a home is South Dakota. The state of South Dakota boasts some of the lowest housing prices in the country. South Dakota, like Florida, imposes no state income taxes. Home values are substantially less than the state of Florida. The cost of living is very low.
Homebuyers can get a lot of house for the money. Jobs are plentiful so it is a great state for younger families and first-time homebuyers. The median home price in South Dakota is $289,000. National median home prices are $349,500. The state is ideal for seniors on a fixed income due to the low cost of living. The only drawback of living in South Dakota is the weather. Average temperatures are 55 degrees.
Best And Worst States For Home Buyers
Here are the top states for home buyers and retirees:
- South Dakota
- Texas
- Alabama
- Georgia
- Florida
- Kentucky
- Mississippi
- Michigan
- Ohio
- Indiana
- Utah
- Idaho
The Worst States for Home Buyers
The country’s worst states are led by :
- New York
- California
- Illinois
- New Jersey
Data collected in determining the worst states for home buyers and retirees are high taxes (especially property taxes), high cost of living, and high crime rates.
New York’s median home price is $498,700. California’s median home value is $635,000. The national median home price is $349,500. New York residents and businesses are fleeing to other states with lower taxes. California homeowners and businesses are heading to states like Texas with lower home prices, lower taxes, and lower cost of living. Illinois residents and businesses are fleeing to Indiana, Michigan, Kentucky, Ohio, and Tennessee.
This BLOG On Best And the Worst States For Home Buyers And Retirees Was Written By Gustan Cho National Managing Director of Gustan Cho Associates.
