USA Today published an article in April that summarized statistics from the National Association of REALTORS® (NAR). Families, couples, and retirees are buying vacation homes and investment property at an astounding rate. NAR reported that almost 40% of homes sold in 2005 were not primary residences. The second home and investment property market continues to boom and is heating up, at least in Texas.
The issue in Texas is how this will effect our economy when other states start having economic and growth issues. For instance, the U.S. has been heavily relying on China for goods and services. We've been pouring our U.S. dollars into their economy and they have been buying our debt. Critics wonder what will happen with China decides to sell these "shares" of the U.S. Just like the stock market, will our economy decline?
On a smaller scale, if Californians and other out-of-state owners start having job losses and see an economic downturn, what will happen to our Texas economy when these homes face foreclosure or are sold in masses? Investment loans are more expensive and harder to get in Texas because lenders know that, when faced with adversity, most borrowers would rather lose their secondary home rather than the one their family lives in.
In Texas, this means we'd then have a glut of houses on the market that may not be able to break even on a sale due to the large number of second-home purchases we've seen in the past two years. Of course, this would be good news for the buyers, but local homeowners who intend to sell their primary residences will suffer.
Read the story on USATODAY.com - Second homes 40% of market.
Dee Copeland, Investment Specialist
AustinHomeNews.com, Team Dee Residential
eRealtyAlliance Commercial Real Estate
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