A rise in the number of buyers who’re prepared to pay for homes fully in cash means that those who require financing are struggling to compete.
Recent data from realtor.com shows that all-cash deals comprise as much as 36% of all real estate transactions in certain U.S. markets. That’s a problem, because those who can pay in cash are often favored by sellers, as it means the transaction can be closed more quickly and with fewer headaches involved.
Cash sales are rising in the Northeast and West, growing by 3% and 2% respectively in those regions compared to last year.
“This is likely a reflection of who’s buying,” Danielle Hale, chief economist at realtor.com told CNBC. “While investors (who are more likely to use cash) are active in the market, non-corporate buyers, likely owner-occupants are a bigger chunk of buyers in this period and that affects the overall cash share.”
Nassau County, New York, saw the biggest share of all-cash deals this year, with almost half of all real estate transactions there being cash, according to Redfin data. Florida actually has several markets with significantly high shares of all-cash buyers including Miami, Tampa, Fort Lauderdale, and West Palm Beach. Atlanta and Tucson, Ariz. are also seeing big growth in all-cash deals.
Data from realtor.com shows that all-cash sales are highest for homes priced at $100,000 or less, followed by those in the $100,000 to $200,000 price bracket. Of course, that means first-time buyers are affected the most, as these buyers tend to target the most affordable homes on the market.
All-cash deals are also popular at the top of the market in the $1 million-plus price bracket. The incidence of all-cash deals is lowest in the $750,000 to $1 million price bracket.