Photo by Dennis Hallinan/Getty Images

Patsy Crouser and her husband, Kenneth, both retired schoolteachers, have long planned to relocate from a soggy suburb of Portland, Ore., to sunny Phoenix or Palm Springs, Calif. They’ve checked out prospective neighborhoods and regularly scan real estate listings.

But in the past few months, “we’ve put on the brakes” on any move, says Crouser, 66. With dozens of houses sitting on the market in their neighborhood, she wonders how long it would take the couple to sell their own property. She also frets about the depth of the recession.

“We’re sick of the weather in the Pacific Northwest and need to be in the sunshine more,” she says. “But now we think it’s best just to wait and see.”

In their newfound hesitation, the Crousers have company. Now that Sunbelt meccas in Florida, Nevada, Arizona and California lead the nation in foreclosures and overall economic distress, the question arises for older Americans: Is a region that once boomed because of favorable climate, low taxes and swaths of golf courses and new housing development no longer such a desirable retirement destination?

Trouble in paradise

Signs of the slowdown in major Sunbelt retirement destinations are clear. In Phoenix, housing prices have fallen more than 30 percent in a year, and jobs continue to disappear. In southern Florida, the condominium market is overbuilt, and home foreclosures continue to rise in Orlando. Las Vegas convention attendance has dropped 30 percent; the housing market is down more than 30 percent; and Nevada’s unemployment, announced Aug. 21, reached 12.5 percent.

The decline signals a major retrenchment for a region that has epitomized American growth. Between 2000 and 2008, the U.S. population grew 8 percent, but Arizona grew more than three times as fast, Nevada nearly four times as fast and Florida nearly twice that rate. At the peak of housing construction, five of the nation’s 10 fastest-growing cities were in these three states. Phoenix, for instance, grew from 983,403 people in 1990 to 1,552,259 in 2007.

All that is changing, demographers and economists agree. Growth is braking across metropolitan areas such as Las Vegas, Phoenix and Tampa, U.S. Census data as of July 2008 show. For the first time, more people left Florida last year than moved in.

“During an economic retrenchment, there’s normally a slowdown in mobility,” says William Frey, a demographer at the Brookings Institution. “People get gun-shy about moving.”

For many older Americans, there’s a realization that they’ll have to work later in life, now that the economic downturn has hit their investment funds and flattened their stock portfolios. “Today, it’s more difficult to retire and move on,” says Steve Cochrane, managing director at Moody’s Economy.com. And job growth in states like Arizona and Nevada isn’t expected to rebound before 2012.

Real estate agent Dan Suppo of Chandler, Ariz., which had been one of Phoenix’s fastest-growing suburbs, sees it all the time: vacationing couples on the verge of retirement, who think they’d like to move to Phoenix, but wonder if they can afford the change. “It’s much more difficult to make a sale these days,” he says.

What’s the problem?

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