'It only makes sense that older adults heading toward a fixed income would be interested in relocating to a state with a more forgiving tax structure,' says Michael McKenna of the McKenna Real Estate group of WEICHERT, REALTORS® – New Colony in Columbia.
Washington, D.C. (PRWEB) September 04, 2013
Rising property values and a strong seller’s market are also among the reasons that have contributed to retirees leaving. While this trend may mean fewer seniors living in the suburbs of Baltimore and Washington, D.C., it opens the door for younger professionals to become first-time home owners in what has been a high-demand home-buying market for much of 2013. It is also an opportunity for current home owners to “step up” to a home that is larger or in a preferred neighborhood.
“We’re seeing many of this region’s first-built communities, like those in Columbia and Ellicott City, turning over,” says McKenna. “We’re seeing revitalization in multiple cities, as retirees are exiting the state and moving to places like South Carolina, Florida, Nevada and Arizona because of the cost to live in Maryland.”
This cost includes the rate of income tax for individuals 65 and older. For example, an unmarried person 65 or older pays Maryland income tax on any amount above $11,200. For married individuals filing jointly, the tax threshold is income above $21,800. Fortunately, social security payments are not included in these income levels. Many retirees are grumbling and even packing their bags to leave the area in favor of states with lower or no state income tax.
While it’s difficult to make a statistical correlation between retirees leaving and first-time Maryland home owners making their mark on the local home-buying market, because of how recently this this trend has begun, what Realtors® like McKenna have been witnessing first-hand can be reflected in recent analytics.
Inventory has been consistently on the rise in affluent Maryland areas like Columbia and Ellicott City for the last several months. According to August 23 ,2013 reports from California-based real estate analytics tracker Altos Research, there were 97 Columbia homes listed for sale, up from approximately 75 in April. And while Ellicott City has seen inventory drop slightly in the past month, the 174 properties listed for sale is a marked improvement for buyers from when inventory was closer to 140 in April.
As for the number of mature citizens living in Maryland, those age 65 and older make up 13 percent of the Old Line State’s population, according to the most recent data from the U.S. Census Bureau. This is slightly less than the national average of 13.7 percent, and falls even further below areas like South Carolina (14.7 percent), Florida (18.2 percent) and neighboring Delaware (15.3 percent)—the latter of which is one of five states with no sales tax. And when it’s taken into account that the most recent census data is from 2010, it will be very interesting to see exactly how the senior migration from Maryland that real estate agents like McKenna have been seeing will play into the number of senior Maryland residents when the next census data is released.
“Middle to upper-middle class retirees will continue to leave high-cost areas like New York and Maryland for places like Delaware, Pennsylvania and the Southeast,” predicts Realtor® Donnamarie Needle of McKenna Real Estate. “Taxation along with cost of living are what drive seniors out of these states.”
Still, it’s not all bad news for retirees in suburban Maryland—the benefits they can reap by selling to younger Maryland home buyers in this market can make for a relaxed lifestyle in other states that offer more lenient taxation.