Although the number of all cash sales is falling in many areas, cash buyers are still dominant, particularly at the lower end of the market. An article in aol.com points out this is making it particularly difficult for more traditional buyers to compete with cash offers, especially in areas where inventory is limited.
When you examine the reasons for paying with cash it's easy to see why such buyers are still top of the pile where many sellers are concerned. At the moment lending conditions are still pretty restricted, and the markets are seeing lots of competition, with high demand coupled with low supply. Cash buyers can often have a huge advantage compared to buyers dependent on traditional funding.
The trend is still prevalent through much of the country, and many areas are seeing higher than normal numbers of cash sales. This is occurring even in parts of the country that didn't particularly suffer during the recent housing bust. The highest numbers of cash buyers are found in the Midwest markets and in Florida, and during the first quarter of this year the largest share of cash buyers in the country was to be found in Miami. In this area nearly 65% sales were for cash, but this is down slightly from the 71% recorded in 2012. Tampa wasn't far behind with figures of 57.1%, while figures for Cleveland were 54.2%.
Cash buyers aren't necessarily institutional investors as most have now left the property market having bought their bargains quite some time ago. Nowadays cash buyers tend to be empty-nesters or baby boomers, or cash-rich families buying second homes or vacation properties. In addition foreign buyers coming to the US are continuing to purchase well priced property in areas such as New York City, Las Vegas and Miami.
Although this might be good news for the sellers, it's not great for traditional buyers who are being forced to compete with all cash offers, particularly for lower-priced homes that appeal to first-time buyers. However the good news is that the number of all cash sales is declining and this should help even things out for low income and first-time home buyers.
The best way such buyers can compete with all cash offers is to make sure they are well qualified. It's important to be able to make a substantial down payment and to have been pre-approved for a mortgage, and of course to have good credit scores. While some sellers may prefer cash buyers, there are still people who aren't in a hurry to close the sale and who are quite happy to go with the buyer able to make a hassle-free purchase.