Cash home sales reached a peak in January of 2011, when 46.4% of all home sales in the United States were sold for cash. That peak was nearly double the pre-housing crisis average of around 25%. In October of 2014, cash sales comprised 35.5% of all home sales, down from 38.7% in October of 2013, and marking the 22nd consecutive year-over-year monthly decline.
As we might expect, there are significant differences among the states. The five states where cash sales were highest in October were Delaware (58.3%), Alabama (51.3%), Florida (51.1%), New York (44.4%) and Michigan (43.1%). Sales include new construction, resales, real-estate owned (REO) and short sales, and the data were reported Thursday by CoreLogic.
Cash sales for REO properties accounted for 58.7% of all REO sales, while cash sales for resales and short sales accounted for about 35% and 33%, respectively. All-cash sales of new homes came in at 16.8% of all new home sales.
As a percentage of all sales, REOs accounted for 7.9% of total October sales. In January 2011, REO sales accounted for nearly 24% of all sales.
Of the nation’s 100 largest metropolitan areas, the five Core-Based Statistical Areas with the greatest percentage of cash sales are:
- Miami-Miami Beach-Kendall, Fla.: 56.6%
- West Palm Beach-Boca Raton-Delray Beach, Fla.: 56.1%
- Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.: 55.6%
- Detroit-Dearborn-Livonia, Mich.: 55.5%
- Cape Coral-Fort Myers, Fla.: 55.2%
The metro area with the lowest percentage of cash sales was Washington-Arlington-Alexandria, D.C.-Virginia at 16%.
The decline in cash sales indicates that investors are looking elsewhere for profits, helping to increase the inventory of homes for sale for entry-level buyers.