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By G. Steven Bray
Based on the most recent data from Corelogic, cash sales of homes fell for the 29th consecutive month in May to 31.9% of total sales, which represents the lowest share since 2008. The percentage of cash sales peaked in Jan 2011 at 46.5%. Prior to the housing crisis, cash sales averaged about 25% of the market.
While this statistic may reflect a healing housing market on a national level, it’s interesting to view the data on a more local level. Cash sales still represent almost half of all sales in FL, GA, NY, and NJ. Given that the strengthening dollar is dissuading cash sales to foreign buyers, it’s likely these elevated percentages still indicate distress in these markets. In TX, the share of cash sales has dropped to 28%.
One positive takeaway from declining cash sales is it may indicate less competition from investors for a tight housing inventory. Given that investors tend to purchase lower-priced homes, this may open up more inventory for first-time homebuyers.