Cash home sales is one of the increasing real estate market trends, according to RealtyTrac.
Tighter mortgage laws and low prices is leading to a significant increase in cash sales for homes in the United States, according to RealtyTrac, the real estate market trends research firm.
According to a RealtyTrac report based on July home sales, approximately 40 percent of all homes sold in the month were paid for in cash. That is up from 31 percent one year ago.
In states with a high number of foreclosures, where property prices are lower than the national average, cash sales are more frequent. Institutional real estate investing, from companies that stockpile properties for later sale, is also on the rise and those sales are almost always conducted in cash, RealtyTrac reported.
In an interview with www.247WallSt.com, RealtyTrac CEO Daren Blomquist explained the real estate market trends include variables that are creating the push for cash sales.
“Both investors and regular buyers are seeing the most opportunity to jump in and buy, and are willing to use their own money,’’ Blomquist said. “With distressed sales, besides the fact that it’s low-priced, when you buy a foreclosed property at the public foreclosure auction, in most states, you do have to pay cash there.”
Florida is the state with the most cash home sales, percentage-wise. Nearly 66 percent of home sales in July were cash transactions in Florida, where the median list price is just under $160,000, which is still a climb from the low of $124,000 in late 2010. Fourteen percent of all sales in the state were institutional investment purchases, and 69 percent of sales in the Miami area were cash sales.
In Nevada, 64 percent of sales in July were cash sales, and 21 percent of homes sold were bank-owned as many homeowners defaulted on their loans. In Michigan, home prices have dropped so low due to Detroit’s financial problems that the median price was down to $129,900 and 53 percent of purchases were cash only.
“Prices are so low that in a lot of cases, it doesn’t even make sense for buyers to get financing,’’’ Blomquist said.
If the economy completes its turnaround from the events of five years ago, the real estate market trends will respond, and cash home sales percentages could change.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.