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Avalon, California
Only accessible via ferry and small plane, beautiful Avalon sits on scenic Santa Catalina Island, about 20 miles southwest of Los Angeles.
The charming downtown includes a pedestrian mall, fish markets, eclectic shops, upscale eateries and more. Three public beaches, South Beach, Middle Beach and Step Beach, sit along Crescent Avenue. Sparkling Avalon Bay is peppered with all kinds of pleasure watercraft.
A majority of Catalina Island's land is protected, but hiking, biking and camping are allowed. Companies also promote eco-tours. Most transportation around town is via foot or golf cart because parking is by permit only and getting a permit can take years.
The massive art deco Catalina Casino, built by chewing gum magnate William Wrigley, Jr., is impossible to miss, offers tours and is home to the first movie theater designed for "talkies." Wrigley Botanical Garden, also a Wrigley contribution, is a marvel.
Neighborhoods are hilly and compact with a mix of colorful bungalows and Mediterranean-style condos.
Cost of Living
Avalon has an overall cost of living 75% higher than the national average.
The median household income is $74,765.
Real Estate
The median home price is $790,000. This is an 11% increase over the previous year. For comparison, the national median home price is currently $385,000 (Realtor.com).
Estimates are that Avalon real estate prices will increase by 3% over the next year.
The median rental price is $1,900 per month. Notes Avalon has 4,000 residents and has grown by 3% during the last decade.
The median age is 34. For comparison, the median age of the U.S. population is 38. Catalina Island Medical Center is the local hospital.
The crime rate is below the national average.
The risk of a 5.0 magnitude or higher earthquake on or within 30 miles of Catalina Island over the next 50 years is 75%.
A wildfire in 2007 forced evacuations to the mainland. It could happen again.
Taxes
The sales combined tax rate is 10%.
California does not tax Social Security, but it does tax all other forms of retirement income at rates between 1% to 13.3%, depending on the amount.
The average effective property tax rate (the annual tax payment as a percentage of median home value) in Avalon is .72%. The annual taxes on a $790,000 home are approximately $5,688.
Mortgages for Retirees
As people live longer and mortgage rates are at historic lows, more and more retired folks are considering obtaining a mortgage rather than paying cash for a new home. You are never "too old" to get a mortgage, thanks to the Equal Opportunity Credit Act, as long as you have the means to do so.
Having said that, retirees face some unique challenges when it comes to qualifying for a mortgage. Most mortgage lenders will look at the same criteria as they would for a young first time homebuyer, including your credit history, debt to income ratio and monthly income. The good news is that Social Security benefits and distributions from 401(k)s, IRAs, and other retirement accounts count as income.
However, because retirement accounts become depleted over time they have a defined expiration date. As a result, a mortgage lender will want to know that the distribution income will continue for at least three years after the date of the mortgage application.
It is also important to keep in mind that if your retirement accounts consist of stocks, bonds, or mutual funds or other "volitle" investments, mortgage lenders will only use 70% of the value in the retirement accounts to determine your mortgage qualifcation.
And while Social Security counts as income, if you are drawing on a family member’s record, such as survivor benefits or spousal benefits, then the income must be documented as payable for at least three years from the mortgage application date.
If you cannot qualify for a traditional mortgage, then a reverse mortgage might be an option. Fannie Mae and Freddie Mac also have programs that can make home buying easier. Check with a reverse mortgage lender or these goverment agencies to see loans and programs available to you.
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