Declining home values can be devastating for homeowners. But falling home prices can create bargains for newcomers to the area. Retirees may now be able to afford homes in places they were priced out of only a year ago.
U.S. News used our best places to retire search tool, powered by data from Onboard Informatics, to find the places where home prices are falling fast. Average home sale prices have declined by at least 45 percent between 2009 and 2010 in every city on our list. To add geographic diversity, we restricted the list to one city per state.
[In Pictures: 10 Bargain Retirement Spots.]
Housing prices are declining fastest in Portland, Ore. (-92 percent),Tallahassee, Fla. (-91 percent), and Tucson, Ariz. (-88 percent). These big cities also offer plenty of affordable entertainment options for seniors. Free things to do in Portland include hiking in the nearly 5,000-acre Forest Park and strolling among the 7,000 rose bushes at the International Rose Test Garden.
Seniors in Tallahassee can stargaze at the Challenger Learning Center Planetarium, explore the 68,000-acre St. Marks National Wildlife Refuge, or visit the reconstructed Spanish colonial Mission San Luis, all for $5 or less. "There's a nice focus on cultural things and the standard of living is very high," says Charlton Prather, 82, a retired physician and former director of the Florida state health department about Tallahassee. He now volunteers at the Mission San Luis, sometimes posing as a blacksmith in a reenactment of the year 1692, and enjoys fishing. "There are lots of lakes within an easy distance of here and we find them a great source of entertainment and food," Prather says.
There are even bigger bargains to be found in some smaller cities. The average home price in Weatherford, Texas, a suburb of Fort Worth, was just $131,586 in 2010. And in Delaware's state capital city, Dover, home prices have fallen 66 percent since 2009 to an average price of $168,805 in 2010. "I wanted to be near Dover because there is less congestion and everything is more easygoing," says Peggy Urso-Savarese, 64, who moved from Rutherford, N.J., to the suburbs of Dover, Del., when she retired for her marketing manager position in 2009. "There's also a lot of things to do. Everything is in very close proximity." Urso-Savarese now volunteers at the Biggs Museum of American Art twice a week.
A few of these affordable retirement spots are located just outside of more expensive cities. Cathedral City, Calif., where average home prices have fallen 85 percent since 2009, to $182,076, is located just 15 minutes from Palm Springs. This city named for its majestic canyons is surrounded by golf courses and boasts year-round warm weather.
Likewise, the planned community of St. Charles, Md., is an affordable suburb of Washington, D.C. While Washington home sale prices climbed 110 percent to an average of $940,992 in 2010, housing prices in St. Charles declined 46 percent to an average of $245,191 during the same time period. "Being a military retiree, I like the closeness to the military bases and the military hospitals here," says Fred Scott, 62, who retired from the air force in 1989 and then spent 20 years working for the postal service. "I really don't like the traffic and parking garages in D.C., but in St. Charles it's much easier to get around because there is plenty of free parking everywhere right outside the door."