Lee, Florida!

Over the weekend Barron's had an article about the real estate market in Florida. It covered a lot of ground with not a lot of depth but was interesting nonetheless.

One part that interested me was that "in Lee," that's Florida and the quotes will make sense in a moment, back in 2006 there were 12 homes for sale under $100,000 and today there are 4200 homes below $100,000.

Lee, FL is up near the Georgia border about halfway between Tallahassee and Jacksonville with biggest town nearby being Valdosta, GA. So it appears to be a small town with a couple of pretty big cities a couple of hours away. As someone who lives about a couple hours away from a big city that is a manageable situation in terms of access to certain services.

According to the town's website the population is 402. If the population is 402 then I doubt there are 4200 homes at for sale at any price. I think Barron's may have left out the word county which if that is the case then we are talking about Lee County Florida which is where Fort Myers is so the area is more populace with more services right there.

According to Realtor.com there are 214 single homes for sale in Fort Myers between $90,000 and $125,000. The 4200 number pertains to the entire county. That kind of supply below $100,000 makes for a very affordable retirement solution. A couple in their 50s from a bigger city elsewhere could easily have a home paid off that they could sell for $300,000-$400,000 to then buy a modest home (presumably a $300,000-$400,000 house in the Northeast would be modest and this would not represent an unreasonable downsizing) outright as mentioned above and have $200,000-$300,000 left over to add to their savings.

With what I have in mind an additional $200,000 would be a meaningful addition for this type of financial situation.

If somehow Barron's did mean the town of Lee, Realtor.com has ten listings with the range being $93,000-$259,000 before the price goes way up for enormous acreage.

Chances are there are plenty of locations around the country that are two hours drive from a big city that are very affordable places to live. This even applies to a place like Boston. Realtor.com has 62 listing in Pittsfield, MA (137 miles from Boston and 157 miles from New York City) below $150,000, 16 of them below $100,000.

If retirement for the boomer demographic stands to be as difficult as it appears then the very unoriginal idea of downsizing will be very important and can be done very thoughtfully. People with no ties to family can make this work in just about any type of climate they favor. In addition to Florida and the Northeast there are plenty of areas in the Mountain time zone where home prices are now quite low and relatively close to a big city, obviously the Midwest and even the Pacific Northwest.

For people with family obligations where a three hour plane rides are not a workable solution there are places like Pittsfield that are a reasonable drive from where someone might be relocating from.

The average 401k balance is in the $40,000-$50,000 range (anyone knowing the exact number, please). Replacing a $70,000 income (again a modest number) in retirement requires at least an $850,000 portfolio, assuming a combined social security benefit of $36,000 and if social security does go away or benefits are meaningfully reduced then what?

A lot of my content along these lines is based on trying to figure out innovative solutions to these sorts of issues. While I don't think of myself as having control issues the idea of success or failure of my financial plan relying on things totally beyond my control like whether social security and medicare will be there when my time comes is simply unacceptable without trying.

While posts about Ranchester, Wyoming or my 78 year old neighbor who does backhoe work may seem a little wacky I am convinced that successful retirement in the next couple of decades will require much more innovation than in the last few decades.