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Some experts say the Sunbelt slump was inevitable. Demographer Richard Florida believes that excessive real estate speculation, overdevelopment and fictitious housing wealth combined to create an illusory boom in the Sunbelt that was financially and ecologically unsustainable. “Much of the cities’ development came from, well, development itself,” Florida wrote in a recent essay in the Atlantic magazine. “At a minimum, these places will take a long, long time to regain the ground they’ve recently lost in local wealth and housing values. It’s not unthinkable that some of them could be in for an extended period of further decline.”

Other experts note that as more newcomers moved to the Sunbelt and demanded the sort of services they had come to expect elsewhere—health care and social services, transportation alternatives to driving, well-funded universities—the role of state government and demands on state budgets expanded. Tax increases didn’t keep pace, not even with the tax bases bolstered by new residents. Now these same Sunbelt states face massive financial headaches.

Florida, in particular, may have trouble recovering from the downturn, Cochrane says. The state’s property tax laws penalize part-time residents or out-of-state homeowners, while hurricanes have created billions in property losses, left the insurance industry in disarray and made obtaining affordable home insurance difficult for many prospective homeowners. And now the job market is in free fall.

The outlook

For workers on the verge of retirement who still have assets at their disposal, or retirees who still have the means to relocate as well as the “desire to be near a golf course and water, there are plenty of alternatives” to the Sunbelt’s traditional retirement destinations, Cochrane says. Texas cities like Austin and San Antonio are showing new appeal for Northerners. Cochrane also predicts that “the Sunbelt will move north a bit,” as new retirees disperse to places like Asheville, N.C., or to the Atlantic seacoast near Charleston or Savannah.

In the long run, however, even Florida retains the fundamentals that made the Sunbelt so attractive for retirement, most demographers and economists agree. “There are long-term forces at work,” and they haven’t essentially changed the Sunbelt’s appeal, argues Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at Arizona State University. “We’ve seen in the United States a continual movement of population to the West and the South, and fundamentally, I think that is going to continue.”

And paradoxically, these tough times may signal the perfect time to move to a Sunbelt city, if getting a good real estate deal is your sole concern. “This is kind of a golden era for those who have capability to move to Phoenix and have reasonable credit and can get a conventional mortgage,” McPheters says. “Prices are down 50 percent from the peak in 2006. You have opportunities to buy housing in Arizona that you haven’t seen in 10 years.”

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