Miami, New York and Los Angeles are 3 of the costliest cities for older homeowners to keep a roof over their heads. Here’s why you might want to steer clear

December 14, 2023December 14, 2023 Admin

More older homeowners find themselves burdened with high housing costs in coastal cities and metro areas than other parts of the country.

A new report from Harvard University’s Joint Center for Housing Studies shows that even though incomes are typically higher in these regions, as of 2021 many homeowners aged 65 and up (both with and without mortgages) spent at least 30% of their household income on housing, utilities, taxes and insurance. This includes 39% of older homeowners in Miami, 39% in New York and 36% in Los Angeles.

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It’s worse for older renters. At least 50% of renters aged 65 and up across 88 of the country’s largest 100 metros put 30% or more of their household income toward housing costs, according to the report.

Adding to the burden of housing expenses, many older Americans have to contend with increased health-care costs.

Here’s a look at the three major cities we mentioned that have some of the highest cost-burden rates for older homeowners — Miami, New York and L.A. — and why you might want to stay away or take flight.

Miami

Miami is already an expensive city. Though the city’s housing market has cooled a bit this year, it remains the least affordable housing market in the U.S., according to RealtyHop.

Though many seniors flock to Florida for the sun and lack of state income tax, one thing they may be forgetting about is the high insurance rates. Some Floridians are asked to pay staggering home insurance rates compared to the rest of the country. This has been attributed to the frequency of natural disasters that hit the state.

Florida may seem like a comfortable place to retire, but its insurance and housing prices can be costly.

Read more: Owning real estate for passive income is one of the biggest myths in investing — but here’s how you can actually make it work

New York

Though 1 in 20 residents left the Big Apple during the pandemic to escape the high prices, New York remains the fourth least affordable housing market in the country, according to RealtyHop.

The median home price has increased to $825,000, the listing search engine says, as buyers now need to spend over $4,200 in monthly payments to own a home.

It doesn’t help that some of the city’s richest residents are contributing to the housing crunch.

Wealthy New York homeowners have been converting multi-family row houses into one- or two-family homes, cutting down on the amount of space available. Approximately 50,000 of these homes have gone through this conversion since 1950, according to an analysis of building records published by Columbia University, translating to an estimated loss of 100,000 units.

Los Angeles

Los Angeles is the second least affordable housing market in the U.S., two rankings higher than New York City but still a notch below Miami, according to RealtyHop.

L.A.’s real estate market is so bad that even the ultra-rich are struggling to offload their mansions — which of course are out of most everyone else’s price range.

A big reason why L.A. and California housing might be so expensive is investors. According to an analysis by Stateline, in 2021, investors purchased 29% of single-family homes sold in California.

The problem with investor-owned residential properties is that they’re profit-motivated. Investors are primarily focused on getting back a return on their investment, which can drive up rent prices. Many older Americans on low fixed incomes may be left in the dust as a result.