Falling home prices make LV retirement destination

After nearly 11 years of living in Las Vegas, Len Cowsert is finding out he does miss the seasonal changes he experienced in Detroit. That's about it.

Cowsert said he was vacationing in Las Vegas four times a year and spending a lot of money, so it was a pretty easy choice for him to retire here. He picked out a duplex in Sun City Summerlin for around $140,000 and found part-time work at the community center to stay busy.

"When I came here, it was like being in a car lot and seeing that pink Cadillac, you know," the 70-year-old retiree said. "Where else is this clean environment? That's a selling point."

With its warm climate, favorable tax structure and selection of casino entertainment, Las Vegas has long been considered an attractive retirement community on par with cities in Florida, Arizona and Southern California.

Now that home prices have tumbled, it's even more attractive.

U.S. News & World Report recently ranked Las Vegas No. 2 in the nation for buying a retirement home for less than $600 a month.

"Few American cities have seen home prices swing as wildly as they did in Las Vegas over the past 10 years," the magazine said. "After nearly doubling from 2002 to 2006, real estate values in Sin City have since plummeted by 57 percent. But the area's glitzy casinos, abundant golf courses and 320 days of sunshine a year continue to make life enjoyable for retirees."

The median home price in Las Vegas was $142,000 in the second quarter, a slight increase from a year earlier, U.S. News reported. After making a 20 percent down payment of $28,400, retirees would have a monthly payment of $567 on a median-priced home in Las Vegas.

U.S. News obtained its home price data from the National Association of Realtors and used a 4.37 percent interest rate on a 30-year fixed mortgage to determine the monthly payment. It does not account for taxes, insurance and utilities.

Phoenix was No. 1 on the list, followed by Las Vegas; San Antonio; Greenville, S.C.; Boise, Idaho; Corpus Christi, Texas; Tampa, Fla.; Columbia, Mo.; Tucson, Ariz.; and Fort Myers, Fla.

Given that real estate values in traditional retirement spots such as Florida and Arizona have fallen by more than the national average, Americans who are ready to embark on the second half of their lives are in a particularly favorable position, the article said.

Housing costs kept California off the list. The median home price in the Golden State rose 9 percent in August to $318,660, the 10th consecutive year-over-year monthly increase.

Financial consultant Dave Bax of Bax Investments emphasized that the $567 monthly payment in Las Vegas is for principal and interest only. Insurance and property taxes would add at least $200 a month, he said.

"And don't forget association fees. If the writer said under $800 per month, it would be more realistic," Bax said.

One reader posted a comment on the magazine story warning about such fees.

"While Las Vegas (seems) like a good place to live and, yes, housing is affordable with the right down payment, be prepared to pay quite a few monthly fees depending on where your house sits," the reader wrote. "All homes come with a monthly association fee and there may be an additional master-plan fee and then there is the fee for keeping the surrounding areas outside of your neighborhood clean. So while the prospects of an affordable home in Las Vegas seem real, please look at the fine print and make sure to ask your Realtor about fees, fees, fees."

It's not true that all homes in Las Vegas have homeowner association fees. However, those in age-restricted communities such as the Sun City developments usually do.

"That's one reason I bought here," Sun City resident Cowsert said. "If you look around the country, this is the best buy. You get all this for $1,080 a year. You've got a swimming pool, 200 clubs, the golf course."

Tom Burt, vice president of the Sun City Summerlin computer club, paid $214,000 for a home about a year before his company succumbed to the technology bubble bursting in the late 1990s.

"I reached a point where I said, 'Let's go.' Housing here was very affordable and it's an up-and-coming community with low taxes compared to California, which is very important to me," the former San Jose, Calif., resident said.

Burt said he considered many of the Florida and Texas cities on the magazine's list. Las Vegas looked like the best all-around deal, financially and for the climate, he said.

Another U.S. News reader questioned why a retiree would still be making house payments.

"We paid our home off years ago and the money went into savings. I would hate to be making even $600 per month house/rent payments now. With health care costs rising almost monthly, we could not afford to pay for a home, too."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.