Thread: Nearly half of all home sales all-cash deals

Nearly half of all home sales all-cash deals

By Les Christie @CNNMoney May 8, 2014: 7:26 AM ET


All-cash deals hit a record 43% of home sales during the first three months of 2014, according to RealtyTrac.
NEW YORK (CNNMoney)

Want to buy a home? Better be carrying lots of cash.

All-cash deals hita record 43% of home sales during the first three months of 2014, according to RealtyTrac. That's up from 19% a year earlier and the highest level reported since RealtyTrac began tracking the deals in early 2011.

The jump is due to two main factors: strict lending standards that make it difficult to get a mortgage and intense buyer competition.

"Inventory shortages, as well as lending regulations favor the all-cash buyer," said Chris Pollinger of First Team Real Estate in Southern California.

Even 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.

Related: Buy vs. Rent -- What you'll pay in 10 big cities

"If they have the ability to, homebuyers will put up cash bids just to jump to the front of the line," he said.

After all, cash deals stand a better chance of closing on time. Buyers dependent on financing may run into snags due to strict mortgage underwriting standards.


$25 million home comes with a Rolls Royce


Interestingly, the increase in cash sales is occurring despite a downturn in purchases by institutional investors -- firms that have been active in buying foreclosures and short sales with cash.

"As institutional investors pull back, there is still strong demand from other cash buyers -- including individual investors, second-home buyers and even owner-occupant buyers -- to fill the vacuum," said Blomquist.

Related: Cost of living: How far will my salary go in another city?

Cash buyers paid an average of $207,668 for homes during the first quarter, a 13% discount to the properties' averageestimated value, according to RealtyTrac.

Part of that disparity is due to the fact that a quarter of the sales were of homes either in the foreclosure process or already foreclosed on by lenders.

Such distressed homes typically sell below market value.

Once riddled with foreclosures, Cape Coral, Fla., had the highest level of all-cash deals at nearly 74% of first quarter sales, according to RealtyTrac. Four other Florida cities followed: Miami (67%), Sarasota (65%), Palm Bay (64%) and Lakeland (62%).

Related: Cities where home prices are hitting new highs

Miami, New York, Boston and coastal California cities are attracting a lot of foreign buyers who are paying in all cash, according to Jeff Meyers, founder of Meyers Research.

In Miami, Latin Americans are putting down deposits of 50% or more on apartments in the early stages of development, enabling builders to self-finance the rest of the building or leverage bank loans at attractive rates. The buyer then pays the balance in cash at the time of occupancy.

In California, Chinese nationals and immigrants are "parking their cash in single-family homes," said Meyers.

In Irvine, Calif., for example, 80% of sales over the past year were to Chinese buyers, he said.

http://money.cnn.com/2014/05/08/real...sh-home-sales/

. . . Another group is aging Baby Boomers, who bought homes decades ago and now are trading down to smaller homes. They have decades of accumulated equity to reinvest in a home purchase.

A separate NAR study shows trade-down buyers rose to 29% of all buyers last year from 25% in 2012 and 23% in 2011.

Who else pays cash for homes? The majority of international buyers, Yun says.

It may be no coincidence then that in Florida, all-cash sales were more than half of all homes sold in January through March.

“Florida is the most popular state for international buyers, who generally pay cash, as well as vacation-home buyers who frequently pay cash.

In addition, downsizing retirees are known to pay cash from the proceeds of their homes in the north,” Yun says.

Other states that stood out for all-cash sales in the first quarter were Nevada, Arizona and West Virginia, accounting for nearly four of 10 transactions, according to NAR.

http://americasmarkets.usatoday.com/...tor-sales-dip/

U.S. Needs 4.6 MILLION New Apartments by 2030

Americans, you must try your level best to buy your homes with cash. To own a home free of a mortgage is freedom, it's real wealth, it's yours free and clear except for property taxes. When we pass the FairTax and state and locals decide "hey, that's smart, we're doing it too", you can own your property free and clear, no worries, no interest, no hassles, no closing fees, no points, no penalties, no property taxes. It is yours.

Originally Posted by Judy

Americans, you must try your level best to buy your homes with cash. To own a home free of a mortgage is freedom, it's real wealth, it's yours free and clear except for property taxes. When we pass the FairTax and state and locals decide "hey, that's smart, we're doing it too", you can own your property free and clear, no worries, no interest, no hassles, no closing fees, no points, no penalties, no property taxes. It is yours.

Half of Americans are spending their entire paycheck (or more)

by Anna Bahney @annabahneyJune 27, 2017: 12:17 PM ETng stats about credit cards

Nearly half of Americans say their expenses are equal to or greater than their income, according to a new study from the Center for Financial Services Innovation. And for those 18 to 25 the percentage is over half, up to 54%.

"Half of America has no financial cushion," says Jennifer Tescher, president and CEO of CFSI, which released the study. "They are living really close to the edge."

Of the 25% who say they have too much debt, 96% report being stressed. This kind of financial stress has lasting health effects for those constantly working to cover the nut, says Tescher. "We can't deal with their health problems if we can't deal with their financial health."

With one out of every two people maxed-out with expenses, it is likely you or someone you know. "It's your co-workers, the receptionist, the guy mowing your lawn, the woman who takes care of your kids."

Maybe it's you.

Why we're struggling

Perhaps we're overspending? Maybe the gig economy isn't working for us?

Certainly we can all do the hard work of cutting back on our expenses, says Tescher. But she says the results of this study show something more structural than individual spending.

"People are spending a shockingly large amount of income on housing. They have to pay for transportation to get to a job. These costs are going up while their wages stay the same."

Another major contributor, according to the study, is irregular income. Nearly 40% of those who spend as much or more than their paychecks have volatile income, which means it varies from day to day, week to week, month to month.

On average, families experienced income volatility five months out of the year, according to the recent book, "Financial Diaries: How American Families Cope in a World of Uncertainty," by Jonathan Morduch and Rachel Schneider, who is also at CFSI.

And in those volatile months, income could range by 25%, meaning $1,000 in income could be $1,250 one month, $750 the next.

How do we get out of the rut?

New financial tools aim to help people manage their money more efficiently. Like Activehours, which allows you to get part of your pay ahead of payday in a way that is not a payday loan. There is also a tool called Even, which, in addition to helping you budget, does just that: it evens out your pay from high periods and shoots it to you when you have lower periods.

But Tescher doesn't see tech tools as a magic bullet.

"We have a series of structural challenges in this country that require policy solutions," she says. "We need to remove the stigma of talking about money problems and make it clear that a lot of people are struggling."

http://money.cnn.com/2017/06/27/pf/expenses/index.html

Our country is broke because of our policies. No one living paycheck to paycheck "or more" can afford a house. People with cash who have sold homes, should buy their next one with the cash from the sale. Obviously if you have no cash or money after expenses, you should continue to rent or move in with relatives until Trump fixes this gawd damn mess.

Warren Buffett to buy 700 million shares in Bank of America