Why More & More Retiring Blacks Are Migrating South

An older couple smiling and cuddling on the couch

Patricia Lewis is like many other professionals who reach retirement age.
She’s widowed. Her three children are grown and married. Suddenly, the dream
home in Stafford, Va., that she planned to spend the rest of her life in seems
too big and requires too much maintenance.

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But its value has almost doubled. She cashes in, moves from the Washington,
D.C., exurb and heads south. She buys a new, smaller home in an active-adult
community for far less and basks in the warmer climate and less harried pace.

“I figured I could take that money and dump it into a home someplace else, a
quieter area with not a lot of traffic and where there are a lot of activities,”
says Lewis, 61, a computer programmer who retired after 26 years at the Defense
Department. She now lives in Sun City Hilton Head, a sprawling development of
homes on lagoons, nature trails and golf courses.

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It’s a familiar tale in a graying nation of more than 63 million people ages
55 and older. But until recently, African-Americans such as Lewis played only a
tiny role in the fast-growing retirement migration fueled by aging baby boomers.
That may be changing. Blacks’ earnings are rising, and so are their
homeownership rates. Skyrocketing real estate values in metropolitan areas and a
desire to return to Southern roots are prompting a mini-wave of retirement moves
among blacks looking for a lower cost of living as well as fun and sun.

“The in-migration market has almost always exclusively been white,” says Dan
Owens, founder of Carolinas Active Retirement Association, a group of businesses
that target retirees to relocate to North Carolina and South Carolina. “As baby
boomers come along, there’s a new generation with wealth and mobility in all
segments.”

That may be why:

• African-Americans are showing up in the glossy brochures and promotional
videos of Del Webb Corp.’s active-adult communities, such as Sun City Hilton
Head here in Bluffton, a town settled in 1825 as a summer retreat for rice and
cotton plantation owners.

• In affluent Sarasota, Fla., Realtor Peggy Hairston, an African-American who
moved from New York 26 years ago, reports an influx of wealthy black executives
from suburbs in the Northeast and Midwest. Las Vegas Realtor Phyllis Schwartz
says new luxury high-rise condos there are attracting rich blacks from Western
states.

• Maryland developer Steve Stavrou built Cameron Grove, a housing development
for people 55 and older in Prince George’s County, a suburb of Washington in
which blacks make up almost two-thirds of the county’s population.

• Martin County, N.C., (pop. 25,000) where the percentage of non-whites is
about 47% and as high as 89% in some towns, is wooing black retirees, including
military veterans. Targeting retired African-Americans who grew up there and
moved away is just one part of the county’s economic development strategy to
replace 800 jobs lost from 1999 to 2003, says Matthew Shulman, coordinator of
the Martin County Entrepreneurial Assistance Program. Retirees can lift a
region’s economy. They pay taxes and want stores, doctors and restaurants.

“We do not want to be known as a red, brown, yellow, black or white retiree
destination but as a place where the welcome mat is open to all who can
contribute,” he says. But “when we market to the military, we understand that a
good percentage of them are going to be African-Americans.”

Shulman estimates that a UPS truck driver or a postal worker in the Northeast
retires with a pension of $30,000 to $40,000 a year. “They have a house that
they’ve owned for 20 or 25 years and paid $50,000 to $70,000,” he says. “They
sell the house and it brings $220,000. They come here and buy the same house
they had there and spend $75,000.”

An untapped market

Until now, African-Americans have been largely ignored by developers of
retirement communities.

Blacks make up about 13% of the U.S. population. They have been much more
likely than whites to stay put when they retired or to move only if they needed
someone else to take care of them, according to research by Don Bradley, a
social scientist at East Carolina University.

“Most of the communities that are trying to attract retirees don’t really
care what color they are as long as they’re affluent,” says Gene Warren, a
Phoenix-based consultant who helps cities and states target retirees on the
move.

Upward mobility is a big factor.

“This is really the first wave of black seniors who got established into the
middle class,” says William Frey, a demographer for the Brookings Institution
who has studied the large-scale return of blacks to the South that began in the
1990s. “This is the first wave of black baby boomers who are starting to get
into active adult age … who were able to benefit from civil rights legislation
and were able to get in to the middle class.”

Family connections are paramount for many black families, he says. That’s why
more blacks are returning to Southern states where they were born and still have
relatives. The potential for that migration to continue is huge. According to
Frey’s analysis, most blacks 55 and older who live in the West, Midwest and
Northeast were born in the South.

Joining the middle class usually means owning a home. This decade’s real
estate boom and astronomical rates of appreciation may have intensified black
homeowners’ desire and ability to move after retirement:

• In 1994, fewer than 43% of black households owned homes. Ten years later,
almost half did, according to Harvard University’s Joint Center for Housing
Studies. Some of the largest increases in black homeownership were among young
blacks. But blacks 55 and older are much more likely to own homes.

“That is their largest form of financial investment because, typically, they
didn’t get into stocks and mutual funds,” says Frank Hefner, economist at the
College of Charleston (S.C.). “If they bought a house in Detroit, even in a
nondescript neighborhood in the ’50s and ’60s, those houses appreciated, and
they’ll have a windfall. They can come back (home in the South) and all of a
sudden live in much better housing.”

• Some of the most dramatic housing price increases are in city neighborhoods
and suburbs that have large black populations. Gentrification of poor and
working-class neighborhoods such as Takoma Park, a neighborhood that straddles
the Washington-Maryland line, and Jamaica Plain in Boston can create a
substantial nest egg for retirees ready to cash out.

The demand for housing in or close to urban centers “is giving an exit
strategy to boomers who no longer need to be in the city,” says David
Drinkwater, president of Grand Gables Realty Group in Scituate, Mass., outside
Boston.

• In metropolitan areas of the Northeast and West, prices have soared. A
third-quarter report by the National Association of Realtors shows double-digit
price gains in 69 of 147 metropolitan areas studied. The median price of a
single-family home climbed almost 15% in a year to $215,900.

“A lot of us have reached an economic plateau in our lives,” Patricia Lewis
says. “Before, the best we could hope for is to retire on Social Security.”