Early this year, cash sales slid higher showing an increase from December but coming in at a considerably lower percentage than where they were the year before. According to CoreLogic, cash sales totaled 35.5 percent of residential transactions. Reports show that this is 1.9 percent higher than the previous month. Cash sales usually rise in January, but this year’s numbers actually came in 4.2 percent lower than what was reported in 2015.
Before the housing crisis, cash sales were about a quarter of all home sales. Homes purchased with cash peaked at 46.6 percent in January 2011. CoreLogic predicts that if cash sales continue to decline overall annually, then they will be hovering around their pre-housing crisis levels a year from now.
Buyers of owned real estate, or REO, typically use cash in most of their dealings. This was the case in January as almost 60 percent of these sales were cash. Resales were next at 35 percent and short sales came in at just over 31 percent. When it comes to new home purchases, cash sales for these residences are usually in the mid-teens. In January, they were at 17 percent.
The REO sales that were all-cash transactions stayed high. However, these transactions were only 7.8 percent of all sales early in the year. Most of the cash sales occurred in Alabama at a rate of 53.1 percent while Florida was second at 49.1 percent. New York was next at 47.4 percent and West Virginia and Mississippi tied with 45.8 percent.
Market trends never fail to intrigue. We’ll have to watch and see if the current trends continue or if change is on the horizon.