10 Cities for Retirement Property Steals

The housing crash has created some great deals for seniors looking to buy homes for their golden years.

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Slide Show: Best Places for Retirement Property Steals

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5. Fayetteville, Ark.: After a 40 percent increase from 1999 to 2006, median home prices in Fayetteville, Ark., have slipped about 21 percent through 2009. The recent decline has dragged Fayetteville's price-to-income ratio from 1.8 in the third quarter of 2005 to 1.2 in the fourth quarter of 2009. For the 15 years ending in 2003, the average price-to-income ratio in Fayetteville was 1.6. While the area may not have a reputation as a retirement hot spot, Fayetteville's low real estate taxes, natural splendor, and university affiliation make it a compelling option for retiring seniors, says Steve Clark, president and CEO of the Fayetteville Chamber of Commerce. "What we are finding is that the retirees that are beginning to focus on us are people who have done that first career for 25 or 30 years," Clark says. "They are not ready to really quit, they're just ready to quit what they are doing." In addition to its plentiful arts and outdoor offerings, Fayetteville is home to the University of Arkansas, which provides seniors an additional outlet to challenge themselves, he says. "If you are over the age of 60 in the state of Arkansas, you can attend our public institutions of higher learning at no charge," Clark says. "And that's graduate programs as well as undergraduate."

6. Punta Gorda, Fla.: Home prices in the quiet community of Punta Gorda, Fla., dropped more than 50 percent from 2006 to 2009, dragging the city's price-to-income ratio down to 1.4 by the end of last year. The area's average price-to-income ratio was 1.7 for the 15 years ending in 2003. The small town on Florida's southwest coast has long been a popular spot for boating and fishing. The recent price declines have provided seniors the opportunity to buy into this pleasant community at a discount, says Jack McCabe of McCabe Research & Consulting. Punta Gorda is "very nice, very laid back, very quiet, [and has] excellent fishing," he says.

7. Burlington, Vt.: Home prices in this tiny city increased significantly during the first part of the previous decade, which pushed the area's price-to-income ratio to 2.3 for the fourth quarter of 2005. A modest home-price decline since then has helped drag Burlington's price-to-income ratio to 1.7 for the fourth quarter of 2009, below its 1.9 average for the 15 years ending in 2003. Although the winters are long, Burlington provides retirees with "small-town comforts and small town values in [a] community where [they] can also enjoy arts, fine food, [and] performances that you wouldn't expect in a community of 39,000 people," says Yves Bradley of Pomerleau Real Estate. "There is also, I have to say, a very strong outreach to retirees to be engaged as volunteers, and that is pretty important here."

[Check out America's Best Affordable Places to Retire.]

8. Fort Myers, Fla.: Home prices in the Fort Myers, Fla., area surged more than 180 percent from 1999 to 2005, thanks to investors and easy lending practices. But because of the market crash, area real estate prices have lost about two thirds of their peak value. Meanwhile, the price-to-income ratio of Fort Myers-area houses has declined from 3.2 in the fourth quarter of 2005 to 1 in the fourth quarter of 2009. For the 15 years ending in 2003, the average price-to-income ratio in the Fort Myers area was 1.5. McCabe says the Fort Myers area has a great deal to offer retiring seniors. The area has "more of a relaxed, laid-back, slower-paced environment with Midwestern values [that would be] very appealing to that kind of core of the country—Illinois, Indiana, Michigan, Iowa, Minnesota," he says.

9. Santa Fe: A 24 percent decrease in median home prices over the past two years has helped drag the price-to-income ratio in Santa Fe to 1.8 for the fourth quarter of 2009, which is below its 2.5 average for the 15 years ending in 2003. Lois Sury, president of the Santa Fe Association of Realtors, ticks off a number of reasons why seniors should consider taking advantage of this increased affordability and buy property in the area. Attractions include great skiing, hiking, medical facilities, arts, as well as a rich cultural history. "Here we have this beautiful, sometimes cobalt-blue sky that sits on your shoulders," Sury says. "That's what people come here for—it's the sun sets and the mild climate, [and] the friendly people."