IRVINE, CA-Cash is king in the housing sector as cash purchases jump to 40% of all sales in July, according to RealtyTrac. The locally based source of foreclosure and real estate data also reports that national home sales volume is up 11% from a year ago, although down in California, Nevada, Arizona and Georgia.
“Low inventory of homes available for sale is proving to be a double-edged sword in many local housing markets that have bounced back quickly from the real estate slump,” says Daren Blomquist, VP of RealtyTrac. “Home prices are accelerating rapidly in these markets thanks to the combination of low supply and strong demand. However, counter to the national trend, sales volume in these markets is down even as the percentage of cash sales rises, indicating there is still strong demand, but that buyers who need financing to purchase are increasingly left out in the cold.”
All-cash purchases rose from 35% of all residential sales in June, up from 31% of all sales in July 2012. Among the nation’s 20 largest metro areas, those with the biggest month-over-month jumps in cash sales were Dallas, St. Louis, Los Angeles, Riverside-San Bernardino in Southern California, Seattle and Phoenix.
“The recent uptick in interest rates could also be contributed to a higher percentage of cash purchases as some non-cash buyers can no longer afford to buy, particularly in high-priced markets,” Blomquist adds.
As GlobeSt.com reported in July, distressed housing inventory in some markets continues to attract institutional investors and all-cash buyers, which still make up an appreciable percentage of the home-buying market, according to RealtyTrac. The firm reported that while distressed inventories are decreasing in many markets, this cohort is still responsible for a good chunk of home sales throughout the country.
For RealtyTrac’s full July US Residential & Foreclosure Sales Report, click here.