So, as it turns out, if household income increases, then more families have more money to buy new homes.

I know. I’m totally shocked, too.

What you’ll find interesting is that Texas, with our steady job market and low taxes has resulted in the Lone Star State leading median household income growth AND new home sales for 2013. In Texas, homebuyers are basically like this:

Aziz Ansari Make it Rain

And home builders, they’re like Liz Lemon here:

Tiny-Fey-Money Dance Make it Rain

 

“This year’s Texas Homebuyers and Sellers Report is showing the impact of the last few years’ strong housing market and economic growth on Texas homebuyers and sellers,” said Dan Hatfield, chairman of the Texas Association of Realtors. “Households are earning more income and new home development continues to play an increasingly important role to meet our state’s ever-increasing housing demand.”

Yup, we’re makin’ it rain, folks. The report, which uses data from the National Association of Realtors, says that Texas homebuyers’ median household income is up 9.6 percent to $91,700 year-over-year in 2013. That’s almost twice the increase in buying power of the average American homeowner, which increased just 5.6 percent to $83,300. First-time homebuyers are making more scratch, too, with a 9.3 percent increase in median household income to $67,800 year-over-year. Repeat homebuyers are making more modest gains, though, with median incomes up just 4.9 percent to $107,100. Still, that’s a lot of simoleons, peeps. And I wonder how many of these new homebuyers are using homebuilding concierges such as Page One to make their experience even better.

Interesting takeaways from the report:

1) Of all homes purchased in Texas for 2013, 30 percent were new homes, up 4 percent from 2012 and almost twice the proportion among home sales nationwide.

2) With tight-fisted lenders rivaling Scrooge McDuck and home prices skyrocketing, married couples continue to lead the homebuyer demographic, up 2 points in 2013 to 71 percent.

3) First-time homebuyers in Texas are a shrinking share of the market, down 2 percent to 33 percent.

4) “In 2013, the average Texas homebuyer was 43 years old, while the average first-time buyer was 31 years old and the average repeat buyer was 50 years old. This is on trend with the ages of homebuyers nationally,” the report stated.

5) The time frame a homeowner actually owns a property decreased from nine years to eight in 2013, but nationally, figures still show homeowners staying in their home nine years. tenure of owning a home in Texas decreased one year to eight years in 2013, but remained unchanged at nine years nationally.

6) 94 percent of Texans sold their home with a Realtor in 2013 (YAY!), compared to 91 percent nationally. Likewise, “FSBO homes in Texas sold for significantly less than homes sold using a  Realtor. The average Texas FSBO home sold for $153,500, compared to $200,000 for the average Realtor-assisted home sale.”

What tidbit of data strikes you the most?

  • 543,000 vacation homes were sold in 2010, ten less than in 2009.
  • 867,000 investment homes were sold in 2010
  • 940,000 investment homes were sold in 2009
  • Only 25 percent of vacation home buyers plan to rent them.
  • Only 20 percent of investment buyers plan to use their second homes themselves.
  • The median price of a vacation homes hovers between $150,000 and $170,000 and is falling.
  • The median price of an investment property is usually around $105,000.
  • Vacation homes accounted for 10% of all real estate sales last year.
  • Investment homes accounted for 17% of all real estate sales last year.
  • Baby Boomers closing out their “peak financial years” are shopping for second homes and swooping up the bargains, but the second home market is still tepid. The benefits: a long-term investment and hedge against inflation if they are buying at the bottom, and income potential through rental. If Boomers are looking toward retirement or a scaling back of work, many see a future retirement home in the second home. That is, they want to lock down a place now while prices are low in anticipation of selling the larger family home eventually.

    Why is this so different from the way Boomer’s parents operated? Most Boomers bought their home, paid it off, and stayed in it until they moved (or were moved) to a retirement home. My uncle lived in his home until he died at the age of 100. But dynamics that made this scenario attractive have changed. Property taxes, for one, are rising in urban areas, as is crime and traffic. Federal tax laws have changed and may change again, making home ownership more (or less) attractive. As income dips, real estate investment can provide additional tax benefits or shelter. Children are spread across the globe and may not be able to take care of an elderly parent in the family home. Boomers lived in homes that average less than 2,000 square feet. Their children (baby boomers) bought and built bigger homes that eventually become costly or cumbersome to maintain.

    Demographically, the typical vacation-home buyer is about 46 years old, has a median household income of $87,500, and purchases a property that is a median distance of 348 miles from their primary residence, according to the National Association of Realtors. (About 34 percent were within 100 miles of their primary residence, and 40 percent were more than 500 miles away.)

    Annually, between 10-27 percent of all homes sold in the United States are in the vacation homes, second home or investment home category. And those numbers will increase because vacation homes are a bargain right now. The median price of a vacation or second home was $150,000 in 2010, down a whopping 11.2% from a year earlier, according to the NAR. Nationally, values at primary residences fell 4.5% in  2010. Nearly 40% of vacation home sales were cash sales, and if a buyer did obtain financing, they put a bunch down, 30 to 40% down. Finally, most vacation home buyers wanted the great deals and found them: nearly 17% of the investment homes they bought were foreclosures.

    Those percentages were little changed for 2010 as home sales declined across the board. There were 543,000 vacation homes sold, down from 553,000 in 2009; investment purchases fell to 867,000 from 940,000.

    One factor depressing sales was the difficulty in getting mortgages due to tight credit markets. Buyers often did an end-around this problem by paying cash. Nearly 40% of vacation home sales were cash deals, while nearly 60% of investment deals were handled that way.