Thanks to the several people who sent in links to the Realty Trac story yesterday about cash buyers accounting for 43% of homes sales in the first quarter of 2014 – and some areas were 50% to 60% cash:
Of the 1Q14 detached-home sales in San Diego County, 21% of them were cash buys, and NSDCC had 28% cash sales.
Who and why?
A. People are sick of payments, especially baby boomers who think about taking a 30-year mortgage and having payments into their 80s or 90s.
B. People are making cash offers to win bidding wars.
C. Investors are buying rental properties for long-term hold, and get a better return than if they left money in the bank.
D. Parents are buying houses for their kids.
E. Foreigners are flush after the exchange rate.
F. Getting a mortgage can be messy.
G. Paying cash is sexy.
Get used to Big Cash floating around the real estate market – it’s here to stay, and if the stock market stumbles, then we should see even more money flow into real estate. It’s like everything else the boomers have screwed up for future generations – we elbow our way in front of younger folks, run up the prices, and then hope the kids can finance the rest.