Rising Rates Prompt Cash Buyers to Act

Rising Rates Prompt Cash Buyers to Act

While higher mortgage rates have been blamed for the slowdown in pending home sales, they may be contributing to an increase in cash purchases, RealtyTrac suggested in a recentreport.

In July, about 40 percent of residential property sales were all-cash transactions. The share presents an increase from 35 percent in June and 31 percent compared to July 2012.

Dallas experienced the biggest monthly increase in cash sales, at 82 percent, followed by St. Louis (+66 percent), Los Angeles (+32 percent), Riverside-San Bernardino in Southern California (+26 percent), Seattle (+21 percent), and Phoenix (+21 percent).

Daren Blomquist, VP at RealtyTrac, explained rising rates could be leading to a higher percentage of cash purchases, while “some non-cash buyers can no longer afford to buy, particularly in high-priced markets.”

Short sales also accounted for a bigger share of sales in July, increasing to 14 percent, up from 13 percent in the prior month and 9 percent from a year ago. Meanwhile, institutional investor purchases and sales for bank-owned properties fell flat, at 9 percent for each type of sale, unchanged from June and July 2012.

Overall, RealtyTrac reported an increase in July sales, with sales volume rising 4 percent from June and 11 percent compared to a year ago.

Despite the national gain, sales were still down year-over-year in eight states—California (-17 percent), Alabama (-14 percent), Arizona (-11 percent), Nevada (-7 percent), Georgia (-2 percent), New York (-2 percent), Hawaii (-1 percent), and Oregon (-1 percent).

Of those states, four still managed to post the biggest annual price gains. California led with a 31 percent annual increase in media home values. Price increases in Nevada, Arizona, and Georgia ranged from 20 to 27 percent over the last year.

Among the largest metro areas, the biggest annual declines in sales were concentrated in California, starting with San Francisco (-20 percent), Los Angeles (-20 percent), San Diego (-19 percent), and Riverside-San Bernardino (-14 percent).
Other large metro areas with significant decreases were Phoenix (-13 percent) and Atlanta (-8 percent).

On the other hand, sales were strongest in Chicago (+27 percent), Minneapolis (+23 percent), Baltimore (+21 percent), Boston (+20 percent), and Philadelphia (+ 20 percent).

 

To see more please go to: http://www.dsnews.com/articles/rising-rates-prompting-action-from-cash-buyers-2013-08-29

 

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Barbara Reaume

Barbara Reaume is a real estate expert working for Coldwell Banker Montecito. She started her career as a real estate agent in 1984 and offers over 3 decades of experience in real estate sales. Specialties include Montecito real estate, Santa Barbara real estate, Santa Barbara homes, real estate financing In Santa Barbara, Montecito relocation, Santa Barbara relocation, short sales and foreclosures. Do you have specific questions about buying or selling real estate in the Santa Barbara area? Ask to be setup on Barbara's email-based home search to get instant alerts on price reductions and new Santa Barbara homes for sale in the area. Contact Barbara Reaume by email ([email protected]), phone (805-610-5403) to find out the value of your home, discuss your options. Connect on Google+ https://plus.google.com/103753350598984606081/about

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