Rising house prices, poor air quality and other big city issues have made Metro Phoenix one of the worst retirees in the country, according to a new report.
The Valley of the Sun was known as a retreat for retirement. But among the 150 most populous US metropolises, Phoenix is now in 140th place, only 10 places from the bottom and only ahead of Albuquerque, New Mexico; San Juan, Puerto Rico; and eight cities in northern and central California. San Juan was the last to finish.
The annual US News & World Report study favored mostly cities in Florida and to a lesser extent Pennsylvania and the eastern United States. The west, and particularly the southwest, performed poorly. Eugene, Oregon was ranked 33rd as the top ranked city west of the Mississippi.
Cities in Florida dominate rankings
In this year’s report, Sarasota was ranked the most desirable retirement destination, followed by three other cities in Florida – Naples, Daytona Beach, and Melbourne – with Lancaster, Pennsylvania in fifth place. Sarasota also took first place in the overall standings last year.
The last place of San Juan meant it replaced Stockton, California at the bottom.
The rankings for most cities have been pretty stable, but Phoenix tumbled from 59th place in last year’s report to 140th place this year. This even dwarfed Tucson’s slide from 87th to 116th place. These were the only two metropolitan areas of Arizona analyzed.
The US News report was based on survey responses from more than 3,000 people ages 45 and up from across the country. It weighted the answers in six major areas: satisfaction (22.3% of the total number of points), affordability of the apartment (20.2%), quality of health care (19.1%), pensioner taxes (15.5%), attractiveness (13th , 6%) and the labor market (9.3%). ). The happiness category includes crime rates and air quality, both of which have been added this year.
“We have seen continued high interest in retirement in Arizona, particularly in Phoenix and Tucson,” said Emily Brandon, senior editor, retirement for US News. However, both cities have low air quality ratings, she added.
Home Affordability Deterioration
The erosion of the affordability of housing has been a major culprit in the massive pension decline for metropolitan Arizona, Phoenix in particular.
“We saw a very sharp increase in average home prices in 2021,” noted George Hammond, an economist at the University of Arizona at Tucson. “These have far exceeded income growth, even if the state received enormous federal income subsidies in 2020 and 2021.”
Retirees who own their homes freely, as many do, would not be hurt as much as those looking to rent or buy. Fixed income retirees would feel the effects more clearly than workers, who can earn higher incomes through salary increases or new jobs.
“Although mortgage rates remain very low, house price increases will have a negative impact on home affordability and will add to housing costs,” said Hammond.
However, Chris Camacho, President and CEO of the Greater Phoenix Economic Council, noted that property prices are also rising in other cities and people continue to flock to the Valley despite the increases.
“The quality of life, costs, competitive taxes, housing, and cultural and recreational facilities in the greater Phoenix area remain highly desirable, as the region’s growth shows,” he said in a statement.
Pollution and other problems
Among other dubious awards, Metro Phoenix is now among the top 10 most polluted metro areas nationwide for both ozone and year-round airborne particles.
However, according to researcher Kiplinger, Arizona is considered one of the more tax-friendly states for retirees, with relatively low income and wealth tax rates and exemptions for various types of retirement income. Arizona, like most states, does not tax any Social Security pension benefits. A lack of state income taxes clearly helped the cities of Florida.
Tucson, and Metro Phoenix in particular, has been booming recently due to strong employment gains, but that didn’t help the cities in Arizona much in the retirement study as jobs were a relatively modest factor.
In last year’s report, Metro Phoenix received an overall score of 6.8, with higher marks for net migration, attractiveness and jobs and a lower mark for quality of life.
This year’s report can be viewed at https://realestate.usnews.com/places/rankings/best-places-to-retire.
Reach the reporter at russ.wiles@arizonarepublic.com.
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