Headlines – Week of April 3, 2011
April 11, 2011
Great Places to Retire
Forbes recently published their annual list of the best places to retire. While Forbes’ list takes into account numerous factors in choosing its “best retirement places,” this year it focused more on tax burden and cost-of-living.
The 16 best retirement areas (listed alphabetically) are:
- Albuquerque, NM
- Charleston, SC
- Charlotte, NC
- Colorado Springs, CO
- Fargo, ND
- Indianapolis, IN
- Jacksonville, FL
- Kansas City, MO
- Lexington, KY
- Nashville, TN
- Omaha, NE
- Pittsburgh, PA
- Portland, OR
- Salt Lake City, UT
- San Antonio, TX
- Tucson, AZ
Among the more affordable retiree cities that made the “best retirement places” list for 2011 are (listed in no particular order):
- Indianapolis: Very affordable housing.
- Fargo, N.D.: Lowest crime rate on the list and inexpensive living costs.
- Charlotte, N.C.: Affordable housing as well as cost of living.
- Charleston, S.C.: Lowest taxes of all the cities Forbes evaluated.
- Colorado Springs, Colo.: Affordable housing and low cost of living.
- Jacksonville, Fla.: No state income or estate tax.
- Pittsburgh: Tax breaks for retirees.
Why Florida’s unemployment rate is so much higher than national average
According to an article in the St. Petersburg Times, Florida’s unemployment remains stubbornly above the national average.
Although the State’s jobless rate recently fell to 11.5 percent, Florida is still tracking 2.6 percentage points higher than the national average.
In its recent State of the States report, Wells Fargo Securities cited 10 states that had both weak economic fundamentals and had undergone a severe recession. Three of them – Nevada, Rhode Island and Florida were singled out as “likely to have the most protracted economic recoveries.”
Here are some of the big reasons the State will continue to lag behind the rest of the nation:
- The biggest albatross for the state has been the housing bust and related implosion of the construction industry but as the article points out, it’s not the only economic drag.
Since the start of the “Great Recession”, the state has shed 350,000 construction jobs, cutting the industry by more than half. The industry added 3,600 jobs in February, but it’s still down 15,200 jobs since just last year.
And those jobs are NOT coming back anytime soon as the median price of a newly built home nationally ($230,600) is now 48 percent higher than that of an existing home being resold ($156,100).
- While the manufacturing industry is rebounding (automobiles, durable goods, electronics, and business equipment), Florida isn’t invited to the party.
According to Hank Fishkind, a central Florida economist and head of Fishkind & Associates, most of Florida’s manufacturing is related to the housing industry — concrete blocks, door frames, milling, etc, and the State’s manufacturing is not going to recover until housing recovers.
- Most of the newly created jobs in Florida pay lower average wages. And lower wages equals less disposable income.
- The end of the space shuttle program has been a big slap for Florida’s Space Coast. Eventually, most of the 9,000 workers connected to the Space Coast will need to find new jobs, putting a huge damper on Brevard County’s economy.
- Florida is a State dominated by small businesses, claiming relatively few Fortune 500s for a state with nearly 19 million residents.
- Florida’s tourism industry will take a hit from rising gas prices tied to turmoil in the Middle East.
- With no personal income tax, Florida relies on property tax revenues to prop up its budget and the State wants to eliminate 7 percent of the state’s government jobs, laying off about 6,700 state workers, to make the numbers work.
- Much of Florida’s unemployment is tied to those who worked in professions or trades that are being phased out or offshored and not expected to return – like certain manufacturing jobs made obsolete by technology.
Florida has felt the impact of call center jobs that were offshored to cheaper labor and are unlikely to return.
Naples Rises as Wealthy Buyers Return to Market
According to a recent article at Bloomberg.com more and more buyers are “finally getting off the fence” for a second home in the state’s affluent vacation areas.
For example, sales in the Naples area last year rose 10 percent, the first annual increase in at least five years, while the median price for homes listed at $300,000 or more gained 4 percent to $544,000, according to data compiled by the Naples Area Board of Realtors.
About half of the properties in the Naples market are second homes, and discounts from 2006 peak prices average about 25 percent.
Some economists this is a case of a “flight to quality” as the good places pick up first.
Other resort towns are starting to follow the lead of Naples as real estate on Florida’s Atlantic coast (Boca Raton, Jupiter and West Palm Beach) rose 32 percent for existing houses and 40 percent for condos in February from a year earlier.
Many realtors cite rising stock prices and the decision not to increase tax rates in 2011 as contributors to the surge in deals. Also, record cold temperatures in parts of the Midwest and Northeast this winter have nudged people to make real estate purchases.
Home values in South Florida markets may show a “surprise upward” trend while U.S. prices remain flat.
The article also cites international buyers seeking ways to protect their wealth with U.S. hard assets as a factor. Florida properties accounted for 22 percent of all purchases made by buyers from outside the U.S. in the 12 months ended in April.
Florida’s ranking of foreclosure filings per household fell to eighth among states in February from second in September last year although the State is ranked second in the number of filings sent to property owners with 18,760.
Posted by Scott R. Lodde