All-Cash Purchases on the Rise
All-cash offers are an unusual real estate tactic, but often times are a winning strategy at the negotiating table, and are presently on the rise. The National Association of REALTORS® reports market share of all-cash purchases have risen and currently make up 33 percent of the market. This is a unique trend, especially since the market has experienced a decrease in distressed homes and investor activity. Florida saw half of all home purchases bought with cash while Nevada, Arizona and West Virginia also witnessed high levels of all-cash sales.
Economists point out many reasons for this popular trend. One is restrictive lending standards have caused many buyers, especially wealthy ones, to forgo a loan. Another is the aging baby boom generation, many of whom are trading down and paying for their purchase with cash accumulated from decades of equity. Some also point to foreign buyers; home purchases by foreign buyers in the U.S. are increasing and those buyers don’t have the credit history in the U.S. to qualify for a loan.
Check housing data in your area to see if all-cash sales are on the rise. Speak with recent buyers who paid for their purchase with cash and find out their reasons. Talk with a REALTOR® to discuss the pros and cons of paying for a home with all cash.