Jonathan Levin writes over at Bloomberg that the “lock-in effect” is supposed to forestall a drop in US housing prices. The Texas capital shows it’s not so ironclad…(Bloomberg)
In Austin, what appears to be happening is an effort to time the top of the market. Like stock traders, Austin homeowners and investors who bought their properties before the boom appear to be rushing to cash in their chips. “I suspect that people are nervous that home values are going to fall, so they’re trying to sell even if they have low interest rates,” Jim Gaines, a research economist at the Texas Real Estate Research Center, told me by phone. Some may have never lived in the homes; others may be taking the cash proceeds to smaller homes or cheaper suburbs; while others might just be moving into rentals while they wait out a market bottom to buy back in.