Retiring to an Economically Depressed Area

[kyounge1956]

I have been wondering recently about the possible consequences, both to me and to the local economy, of moving to an economically depressed area after retirement. For a long time I've been planning to relocate to the central Washington coast after I leave my job. I am looking for somewhere that doesn't get hot in the summer, and the low real estate prices are also a factor, since in order to make my finances work out I need to be able to replace my house and have a good chunk of money left over to add to my nest egg.

In the past, the county I'm planning to move to had an economy that was mainly based on logging and fishing, both of which have been in decline for a couple of decades now. I doubt that either industry will ever again be what it was to this county in the past. With greater mechanization, the same amount of wood products can be produced with fewer people than it used to require, and I would guess the same is true of catching fish, even if they are there to be caught. The two biggest towns in the county are both losing population. The population of the county as a whole is still rising slowly, but my best estimate is this is mainly due to two things: people moving into a more resort/retirement oriented community right on the shoreline (gained 31% between 2000 and 2008) and people moving into formerly more rural towns on the east edge of the county, from which they can commute to Olympia (the state capitol—it's about 40 miles each way). Median incomes are significantly lower than for the state as a whole, as are real-estate prices—as already mentioned that is one reason I plan to move there.

What happens to the economy when people with income from outside move into an area like this? I guess some jobs must be created as a result, but I would expect they are lower-paying than working in timber or fisheries was in days gone by. Is it better to create low-paying jobs, or no jobs at all? Then too, people moving in from elsewhere with independent incomes higher than the local levels may cause prices to rise—not a good thing. What, if anything, can a person moving into such an area do to make their arrival economically beneficial, rather than detrimental, to the people who already live there? Maybe I need to look again at that thread from a while back about "financial permaculture". What happens to real-estate values over the long term, when population is declining? If there are enough houses for everyone now, there will be more houses than needed with a smaller population, and less demand with the same supply means prices fall, right? That does not sound so good if I needed to take out a reverse mortgage in my extreme old age to eke out my finances.

In general, what can be expected over time in an area where the economic base has gone away? Do you live in or near a place where this has already happened forty years or so ago—where the mine played out or the mill shut down or whatever? What should I expect in the future there?

 

[LOL!]

I would expect health care to go away as well. Would you not want to be in a place where an ambulance would reach your house in a few minutes? And where the hospital could put a cath in you if needed?

 

[FANOFJESUS]

It is not cool in the summer but I have been thinking along the same lines as you.

Cheapest places to live in America – Topeka, KS for under $840 a month

 

[unclemick]

Hoquiam, Aberdeen had really good looking cheerleaders(58/60) when we played em in high school. Been to Ilwaco/Long Beach/Astoria Oregon more times than I care to admit growing up over the decades.

I grew up in that cloudy climate - takes some getting used to I would think.

Here near me north side of Kansas City a lot of old packing plants now defunct.

But even here - several suitable buildings are getting the 'NEW YORK CITY!' loft makeover.

Not cheap rent when completed but I don't know if it's enough to make my neighborhood pricey. Still have plenty of cornfields and cow pastures to build on away from the river.

heh heh heh - My Sister(greater Kent) keeps bugging me to come back to the old stomping grounds but even those old classmates I keep in touch with do a little snow birding in winter when possible - Arizona is no. 1.

 

[brewer12345]

I think it depends. Some areas decline to a certain extent and then stabilize. So many areas of upstate NY (Albany, Buffalo, Rochester) saw manufacturing and ag (especially dairy) slide a long way and never really recovered, but they stabilized and are reasonable places to live: decent access to healthcare, more or less stable populations, not major crime problems, etc. Other places get hit and keep spiralling downward. Detroit would be a poster-child for this sort of thing, but there are maky others. Population shrinks as people move out, services decline as the tax base erodes, the population grows older and poorer as those with youth or valuable skills depart, crime rises. This sort of place I would not want to live.

So decline is OK as long as it does not happen too far or too fast. I also would want to be careful about how much of my net worth I sank into a house in a real estate market like this.

 

[audreyh1]

I'm not sure whether jobs created by people retiring in an area are lower paying than fishing and logging. If it is an area that attracts retirees due to it's physical beauty, it seems that the economic base would improve as long as there is a sufficient influx of people.

Audrey

 

[kyounge1956]

I would expect health care to go away as well. Would you not want to be in a place where an ambulance would reach your house in a few minutes? And where the hospital could put a cath in you if needed?

You're right, I don't suppose I would want to be somewhere it would take an ambulance half an hour to get to. By googling a little, I found the Aberdeen Fire Dep't annual report. Their average EMS response time in the City of Aberdeen is 4.5 minutes. I also found a news story about the rescue of a swimmer at Ocean Shores where the responders arrived within two minutes!

I've no idea of the capabilities of the local hospital. I would guess that for any kind of major medical stuff (e.g. heart surgery or joint replacement), you probably have to go to Seattle even today, which is about what I would expect in a county with a population of under 75,000 people. Off duty EMS staff do a considerable amount of work transporting people to hospitals in Seattle, Tacoma or Olympia. My HMO's nearest clinic is in Olympia so I will have to travel for checkups and eyeglasses anyway. Maybe if Ocean Shores becomes an in-state retirement Mecca, they will open a branch there. But I think Sequim has probably beaten them to the punch on that one.

You have given me something to think about.

 

[flyfishnevada]

I agree it would depend. If the area has a tourist draw or is close enough to a larger metropolitan area, then it may continue to grow as tourists and young families move in. If not it could go downhill. You could lose services such as medical, but also movie theaters, restaurants, etc. If a lot of retired folks move there they could support some of that, but the economy would turn to service and lower paying jobs, I would think. Also depends on the local government. If they are actively trying to diversify the economy, it could be a great place to live. If not it could get real quiet.

It depends on what you want too. A depressed area with a few locals and retirees, might be your cup of tea. On the other hand you might be looking for a vibrant small town. We moved to a very small community about 8 years ago an hour from my job. It is quiet, serene and beautiful. Also quite boring. We hoped it would grow a little, but it hasn't happened and probably won't for years. More people moved in but the services didn't follow. Great for raising kids, keeps em out of trouble, but not great for active retirees.

 

[kyounge1956]

I agree it would depend. If the area has a tourist draw or is close enough to a larger metropolitan area, then it may continue to grow as tourists and young families move in. If not it could go downhill. You could lose services such as medical, but also movie theaters, restaurants, etc. If a lot of retired folks move there they could support some of that, but the economy would turn to service and lower paying jobs, I would think. Also depends on the local government. If they are actively trying to diversify the economy, it could be a great place to live. If not it could get real quiet.

It depends on what you want too. A depressed area with a few locals and retirees, might be your cup of tea. On the other hand you might be looking for a vibrant small town. We moved to a very small community about 8 years ago an hour from my job. It is quiet, serene and beautiful. Also quite boring. We hoped it would grow a little, but it hasn't happened and probably won't for years. More people moved in but the services didn't follow. Great for raising kids, keeps em out of trouble, but not great for active retirees.

The nearest major metropolitan areas are Seattle and Portland OR. It's about a 3 hour drive to Seattle and I would guess four or even a bit more to Portland. I don't know that there are many young families moving in, but I doubt it. From what I read, jobs are very thin on the ground and good paying jobs even scarcer. I'm not sure how hard local gov't is trying to expand and diversify the economic base or how well they are succeeding if they are trying.

Your point about vibrant vs quiet is a good one. I think Seattle is considered a pretty vibrant city but I take very little advantage of that aspect of living here. I'm not into fine dining, theater, live music, the arts or the club scene, and only occasionally go to a movie at the theater. Pretty much a stick-in-the-mud, is what I am. So quiet is OK by me but if vital services became unavailable that would be a problem.

 

[Ed_The_Gypsy]

Have you seen the tsunami emergency route signs in Aberdeen (I think it was Aberdeen)?

 

[ziggy29]

If you don't need a lot of excitement and you're sure you'll never have to go back to 2*rk again, it could work. At least the labor costs for services will be low in a depressed area (usually). Of course, the risks are that (a) you may need a j*b at some point when there are none to be had or (b) some essential services might close up and leave town if the implosion is long enough or deep enough.

 

[haha]

(b) some essential services might close up and leave town if the implosion is long enough or deep enough.

It has surely been long and deep so far.

Another place to look is Longview. A lot more going on, and much closer to Portland. It has also been impacted by takeover of Longview Fiber by a Canadian asset manager but has other things going for it. I haven't been there during the current recession.

Ha

 

[flyfishnevada]

Your point about vibrant vs quiet is a good one. I think Seattle is considered a pretty vibrant city but I take very little advantage of that aspect of living here. I'm not into fine dining, theater, live music, the arts or the club scene, and only occasionally go to a movie at the theater. Pretty much a stick-in-the-mud, is what I am. So quiet is OK by me but if vital services became unavailable that would be a problem.

Consider though that you might miss that stuff when its not around if you have no access. You might not. We never ate out much, but now we miss the opportunity when we get the urge. We can't just order up a pizza or run to Chili's. But it's not about us, its what you can handle. Also consider the mundane stuff you might miss like book stores, coffee shops, museums, etc. Not saying you shouldn't do it, but when your an hour from that stuff like we are its definitely a different lifestyle.

Not to mention small town politics, gossip and cliques...don't get me started.

 

[Hershey102]

Lot's of good advice. If you haven't already, spend at least a week or two on vacation in the area.

 

[F4mandolin]

Grew up in the general area myself (Castle Rock)...I had a place in Ocean Park/Long Beach for a while.....same thing happened in Castle Rock, good place to grow up but then the timber industry took the big hit. When I go back to visit it just seems so depressing compared to what it was (or at least I remember it being). The Central coast had a fling back in the late 60's into the 70's when Pat Boone inc etc tried to make it into THE place to retire. The main worry for me if I was living there would just be the general overall attitude of the area.

 

[WhoDaresWins]

I don't think that low cost necessarily has to equal depressed. I reside in a suburb of Pittsburgh and the cost of living is very reasonable here. We have a nice climate...does not get too hot in the summer and winters are cold with snow but not excessively long(usually not as much as we got this week-end which was the worst snowfall since 1993). Top notch medical care, good universities, cultural life, sports teams, affordable housing all available. Taxes are rather high in PA however as are utilities compared to other places. We went through our big economic contraction already in the 1980's when the steel mills closed. In PA we also have a lottery which benefits people 60 and older in numerous ways.

 

[kcowan]

Just make sure that there are competent local hospitals. Sometimes these get closed as the system becomes more efficient. Then when you have a heart attack, it is a three-hour ambulance ride for critical care. Usually that is not a good outcome.

 

[Orchidflower]

THE most important thing for you to find out is if there is a hospital with a catheterization lab/cath lab nearby that could get to you quickly. If not, you might not make it if you have a heart attack. Let's face it, cancer can wait...a heart attack not so much.
If you have the cath lab then everything else is tolerable if you don't mind the lack of entertainment, variety and so forth. Prices will be cheaper and services will cost less.
The area I'm in right now used to have HUGE corporations here and the area had money. Then the 80's hit and the corporations left one by one. The area turned from a basically manufacturing/farming area to a service-oriented one with river boat gambling trying to woo people in to spend money. It is sloooowly turning around in this area of 400,000 people, but it's been 30 years of real hardship for the residents with many leaving for greener pastures.
However, for you in retirement, this could be an opportunity for you to spend less on your cost-of-living and might not be such a bad choice financially.

 

[Urchina]

Another thing to consider: in small towns that have taken financial hits (and even small towns in general), there's often a reserve or coolness, socially, given to outsiders who move in. Sometimes there's out-and-out resentment, and this is particularly exacerbated if outsiders are driving up the price of real estate and making it hard for locals (and their kids) to stay. This has / is happening to three of the towns I've lived in, and it's a sometimes uncomfortable position to be in. If you don't already have friends in the town, and you are planning on making them there, you might think about how this type of dynamic (locals vs. outsiders) will affect your social life and activities.

This can happen anywhere, of course, but some places it's a little more entrenched than others.

 

[freebird5825]

Another thing to consider: in small towns that have taken financial hits (and even small towns in general), there's often a reserve or coolness, socially, given to outsiders who move in. Sometimes there's out-and-out resentment, and this is particularly exacerbated if outsiders are driving up the price of real estate and making it hard for locals (and their kids) to stay. This has / is happening to three of the towns I've lived in, and it's a sometimes uncomfortable position to be in. If you don't already have friends in the town, and you are planning on making them there, you might think about how this type of dynamic (locals vs. outsiders) will affect your social life and activities.

This can happen anywhere, of course, but some places it's a little more entrenched than others.

Ah, I can see you've been to East Nowhere, NY.
I've lived in this area since 1980, and there is still that "You didn't go to high school here did you?" undercurrent. I mostly ignore it.
The majority of my closest friends are transplants also. It's just the way it is in really small towns.

 

[Nords]

You're right, I don't suppose I would want to be somewhere it would take an ambulance half an hour to get to.
You have given me something to think about.

The nearest major metropolitan areas are Seattle and Portland OR. It's about a 3 hour drive to Seattle and I would guess four or even a bit more to Portland.
Your point about vibrant vs quiet is a good one. I think Seattle is considered a pretty vibrant city but I take very little advantage of that aspect of living here. I'm not into fine dining, theater, live music, the arts or the club scene, and only occasionally go to a movie at the theater. Pretty much a stick-in-the-mud, is what I am. So quiet is OK by me but if vital services became unavailable that would be a problem.

I think the question you have to answer is whether or not you'll enjoy small-town living, a duel-edged sword with all its opportunities yet its inevitable in-your-business curiosity of your new neighbors.

We chose Hawaii for its weather, but we chose Oahu and our neighborhood for its schools and its proximity to services... not just hospitals but home-improvement stores, cheaper big-box/grocery retail, short driving distances, and community activities. We're near the crossroads of a few major military bases and commands, so we're easier for family & visitors to get to (which overall is a good thing). Our neighborhood is big enough that I don't feel obligated to get involved with the homeowner's board or have to be street mayor or any of that other civic stuff unless I want to.

We could enjoy similar weather amid a much cheaper and quieter lifestyle on Molokai or even Lanai, but it would be at least 2030 before any of the residents stopped calling us "malihini"...

TromboneAl recommended a book a few years back called "Small Town Bound: Your Guide to Small-Town Living, from Determining If Life in the Slower Lane Is for You, to Choosing the Perfect Place to Set Roots" by John Clayton.

 

[REWahoo]

... a duel-edged sword ...

That's what I call a cutting remark!

 

[happy2bretired]

Ah, I can see you've been to East Nowhere, NY.
I've lived in this area since 1980, and there is still that "You didn't go to high school here did you?" undercurrent. I mostly ignore it.
The majority of my closest friends are transplants also. It's just the way it is in really small towns.

Glad to know that it's not just a midwest thing. I've heard that so many times about small towns in my state too.

 

[Nords]

That's what I call a cutting remark!

Too much swords&sorcery fiction lately... then I decided that I kinda liked it.

 

[unclemick]

Glad to know that it's not just a midwest thing. I've heard that so many times about small towns in my state too.

- Heck I remember the 'refugee from Minnesota' jokes in Seattle. Hardly a small town. Run into the same undercurrent here in the burbs north of Kansas City.

Didn't notice in the area I grew up(cause I lived there) - Vancouver, Kelso, Longview, Castle Rock, Long Beach, etc.

heh heh heh - still have relatives down south - in Kalama .