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Fewer buyers bringing all-cash to close

MIAMI – Feb. 8, 2016 – One in three buyers paid all-cash to close on their real estate transactions near the end of 2015, according to data from CoreLogic. The share of all-cash transactions dropped to 33.9 percent in October year-over-year – way down from the 46.6 percent peak reached in January 2011.
However, Florida sales still have a high percentage of all-cash transactions. Nationwide, the state ranked second behind Alabama with 46.7 percent of transactions cash sales – and in two South Florida metro areas, more than half of their October transactions were all-cash sales.
Nationally, the number of all-cash transactions dropped to 33.9 percent year-over-year in October. Still, historically on a pre-crisis average, cash sales tend to make up about 25 percent of the market. CoreLogic estimates that cash sales will return to that level by mid-2018.
Sharp declines in REO sales are the main reason cash sales are steadily dropping, CoreLogic notes. REO sales comprised 7.3 percent of all residential home sales in October 2015, a third of the peak in January 2011 at 23.9 percent.
“Foreclosure completions have fallen substantially over the past few years across the nation,” says Frank Nothaft CoreLogic’s chief economist. “This has led to a drop in REO sales. Roughly one-half of REO homes are bought for all cash. Thus, the drop in REO has been an important reason for the national decline in the cash share of all sales.”
The following states continue to see cash sales remain higher than 40 percent in October:
Alabama: 51.7%
Florida: 46.7%
New York: 46.3%
West Virginia: 44.4%
Indiana: 40.8%
By metro area, three out of the U.S. top five are in South Florida:
Miami-Miami Beach-Kendall, Fla.: 51.6%
West Palm Beach-Boca Raton-Delray Beach, Fla.: 50.9%
Detroit, Mich.: 50%
Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.: 49%
Philadelphia, Penn.: 48.9%
Source: “What’s Driving Down the Cash Sales Share?” DSNews (Feb. 4, 2016)
© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688
Source: Florida Realtors Feed

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