Thursday, May 8, 2014

Nearly Half of U.S. Home Sales Are All-Cash

PALM BAY, Florida -- The share of all-cash sales reached a new high in the first quarter even as the share of institutional investor purchases dropped to the lowest level since the first quarter of 2012, according to a report released today by RealtyTrac.


Among metropolitan statistical areas with a population of at least 500,000, those with the top five highest percentages of cash sales were all in Florida: 


1. Cape Coral-Fort Myers 73.6%
2. Miami 67.1%
3. Sarasota, 65.1%
4. Palm Bay (includes all of Brevard County) 64.1%
5. Lakeland (61.8%


The report shows 42.7 percent of all U.S. residential property sales in the first quarter were all-cash purchases, up from 37.8 percent in the previous quarter and up from 19.1 percent in the first quarter of 2013 to the highest level since RealtyTrac began tracking all-cash purchases in the first quarter of 2011. 


Institutional investors — entities that have purchased at least 10 properties in a calendar year — accounted for 5.6 percent of all U.S. residential sales in the first quarter, down from 6.8 percent in the fourth quarter of 2013 and down from 7.0 percent in the first quarter of 2013 to the lowest level since the first quarter of 2012.


“Strict lending standards combined with low inventory continue to give the advantage to investors and other cash buyers in this housing market,” said Daren Blomquist, vice president at RealtyTrac. “The good news is that as institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers — including individual investors, second-home buyers and even owner-occupant buyers — to fill the vacuum of demand left by institutional investors.


“While the institutional investor purchase share declined in the first quarter in 18 of the top 20 markets for institutional investor share a year ago, home prices continued to appreciate in most of those markets, albeit at a slower pace in many cases,” Blomquist continued. “There are a couple notable exceptions that could be cause for concern: Jacksonville, Fla., where the institutional investor share of purchases was down to 13.5 percent in the first quarter compared to 18 percent a year ago and where median home prices decreased 1 percent from a year ago in March after 15 consecutive months of annual increases." 


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