All-Cash Home Sales Hit Record High

Those of us in the real estate industry have certainly seen the number of all cash home sales shooting upwards as of late but I had no idea just how high the number was. According to a CNNMoney report Thursday, 43% of all home sales nationwide were all-cash deals. The 1st Quarter numbers, complied by nation-wide real estate information and statistics company RealtyTrac, are up from 19% a year earlier and are the highest levels reported since RealtyTrac began tracking such deals in early 2011.

The jump is mainly due to two factors: strict lending standards that make it difficult to get a mortgage and intense buyer competition. Institutional investors - defined by RealtyTrac as entities that have purchased at least 10 properties in a calendar year - accounted for 5.6% of all sales in the first quarter, down from 6.8% in the fourth quarter of 2013 and down from 7% in the first quarter of 2013. That seems to indicate more individual buyers are purchasing single homes, and even first time buyers who would ordinarily finance their purchases are making all-cash offers to appear more attractive to sellers, said Daren Blomquist, Vice President at RealtyTrac. "If they have the ability to, homebuyers will put up cash bids just to jump to the front of the line," he said.

Cape Coral, Florida, had the highest level of all-cash deals at nearly 74% of first quarter sales, and four other Florida cities followed: Miami (67%), Sarasota (65%), Palm Bay (64%) and Lakeland (62%). About 33% of all California residential property sales in the first quarter were all-cash purchases, up from 20% percent in the first quarter of 2013. 

Another interesting report came out Thursday from the California Association of Realtors that a recent survey showed luxury buyers preferred hilltop homes over oceanfront properties four to one in 2013, with only 10 percent of multi-million dollar home buyers opting to purchase a home on the water. By contrast, 41% of buyers who bought homes in the luxury home market said they purchased a home with a hilltop view.