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So What Are All Those Real Estate Cash Buyers Buying Anyway?

Jan 30

filed under: Market Conditions, Real Estate

Well it isn’t old news yet, after all we are just heading into February. So did you know that 2011 in the Valley we had the second highest sales record of the decade (100,959) running second to 2005’s housing bubble heights (104,725). But what is really amazing is that 47% of the sales in 2011 were cash sales. That’s right, Valley Buyers purchased over 47,400 single family properties with no financing. So just what did they buy. . . well here’s the break down. Seldom do I use graphs, but these are pretty simple to understand.

In summary, the $100,000 and under price point stacked up to 63% of the total cash sales, ( the majority of the buyers being investors) with another 24% in the $100,001 – $200,000 price range. Looking even closer, the cash transactions show that 48% were foreclosures and 24% were short sales. So if we add the numbers up 72% of the cash sales were distressed properties.

It will be interesting to see where we end up in 2012 since foreclosures are starting to dwindle down yet short sales seem to be on the rise as lenders are finally starting to realize they are far better off doing a short sale rather than a foreclosure. Will wonders never cease! Also inventory levels are substantially lower than where they were a year ago, hopefully resulting in more sellers putting their homes on the market and constituting more traditional sales at some higher prices.

 

Written by Howard Harris