Nearly a third of homebuyers in the Killeen-Temple area are getting mortgages so they can buy a second home.
Financial website SmartAsset looked at 2017 mortgage data from 402 U.S. housing markets to determine how many homes were being purchased as a second residence. The Killeen-Temple area ranked No. 31 overall, with just over 30 percent of all local mortgages studied in the survey designated for a second home.
Many of the markets listed at the top of the ranking are familiar vacation and retirement destinations: Ocean City, New Jersey; Panama City, Florida; and Myrtle Beach, South Carolina.
So why are so many people investing in second homes in this area?
“There’s a huge market here for people buying a home as an investment,” according to Executive Officer Michael DeHart, with the Fort Hood Area Association of Realtors.
“A lot of these people were military who were stationed (at Fort Hood) for three to five years ... and when they were transferred, bought a home at their new duty station.
“But they keep the home here as a rental investment.”
Realtor Ron Chipkin of Casa Realty has extensive experience selling homes to investors who purchase one or more properties, repair and upgrade them, and then rent them for income.
“I would say the majority of my sales are investor sales since 2014,” said Chipkin, who’s been selling homes in the area for 20 years.
Chipkin said it’s absolutely believable that 30 percent of the mortgages in this area could be going toward purchases of second homes.
In fact, he feels the overall market for investment property could be even hotter than SmartAsset realizes.
“While half of my sales may have been for investors to put properties into management ... many of those were cash sales,” Chipkin said.
But Chipkin feels the overall market for those secondary investments is tightening, with prices for older homes in need of a makeover rising as more buyers scour the market for deals that promise a high return on investment.
“It’s becoming increasingly more difficult for us to get any similar deals to what we were finding when we really started looking into this market in 2014-2015,” Chipkin said.
That may be bad news for investors, but good news for sellers hoping to get the most out of their older home. While new home construction in the Killeen area has risen sharply, DeHart thinks the market for existing homes continues to be strong.
“Do I think that new home construction is depressing the market for existing home sales? Not at all,” DeHart said.
And while there are some older neighborhoods buyers may avoid due to the overall condition of the homes, DeHart said he believes many homebuyers chose where they live based on their pocketbook.
“We all want to live in the best house we can afford to live in,” DeHart said.