Residential Cash Sales Continue to Climb

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IRVINE, CA—All-cash purchases of residential properties nationwide are continuing to rise, according to RealtyTrac. The firm reports that all-cash sales accounted for 44.4% of all US residential sales in January, the 7^th consecutive month where all-cash sales have been above the 35% level. Metro areas with the highest percentage of all-cash sales last month included Miami; Jacksonville, FL; Memphis; Tampa; and Las Vegas.

As GlobeSt.com reported last week, institutional investors—which RealtyTrac defines as entities purchasing at least 10 properties in a calendar year—accounted for 5.2% of all US residential property sales in January, down from 7.9% in December and down also from 8.2% in January 2013, according to RealtyTrac. The January share if institutional-investor purchases represented the lowest monthly level since March 2012, a 22-month low.

Regarding this dichotomy between institutional-investor share and all-cash purchases, Daren Blomquist, VP of RealtyTrac, tells GlobeSt.com that the fact that cash sales are continuing to rise even while institutional investor purchases fell dramatically in January is evidence that there is more to the cash buyer trend than just the big buy-to-rent investors. “Other cash buyers are participating in the market, from local and out-of-state mom-and-pop investors to foreign buyers to retirees potentially leveraging retirement accounts to buy with cash. Given the tighter lending requirements and the recent uptick in interest rates, many of these buyers may find it easier to purchase with cash. It's entirely possible we could see those cash buyers later take out a loan on the house, but a cash offer now is often the best way for them to buy properties quickly.”

RealtyTrac also reports that the share of residential properties sold at the public foreclosure auction in January jumped to 1.5% of all residential sales, up from 1% in December and up from 1% in January 2013. Metro areas with the highest percentage of foreclosure-auction sales included Atlanta; Salt Lake City; Charlotte, NC; Las Vegas; and Miami.

In addition, short sales accounted for 5.9% of all US residential sales in January, up from 5.4% in December, but down from 7.4% a year ago. States with the highest percentage of short sales were Florida, Nevada, Illinois, New Jersey and Maryland.

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