Cash Sales Decline as REO Sales Dwindle
While all-cash sales continue to decline as a percentage of all home sales, in several states they still account for more than half of all residential sales transactions. CoreLogic said on Wednesday that 36.1 percent of home sales in November 2014 were all-cash, down from 38.8 percent one year earlier. November became the 23rd consecutive month in which the share of sales declined on a year-over-year basis.
Their portion of all sales did tick up by half a percentage point from the all-cash share in October but CoreLogic said this is typical for the fall and winter months. Because of this seasonality the company said comparisons should be made on an annual basis.
The peak of cash sales occurred in January 2011 when those transactions had a 46.4 percent share. In more typical times, i.e. before the housing crisis, the share averaged 25 percent.
Still the share remains high in several states. In Michigan 54.4 percent of sales were all-cash and in West Virginia 53.3 percent. Florida followed with 51.4 percent, Alabama and South Dakota rounded out the top five at 50.7 percent and 45.5 percent respectively. Among large metropolitan areas the highest incidence was in Detroit where cash sales made up 63.2 percent of the total. Those sales also accounted for more than half of all sales in Miami, West Palm Beach-Boca Raton, Philadelphia, and Fort Lauderdale.
Real estate owned (REO) sales continue to have the largest proportion of cash sales, 61.1 percent in November, but with their numbers declining those sales have a lessening influence overall housing statistics. When cash sales hit that January 2011 peak REO made up 23.9 percent of all home sales; in November 2014 only 10 percent of sales were of REO properties. Existing homes sales (resales) were 35.2 percent all-cash transactions, short sales had a 32.7 percent cash share and newly constructed homes 16.3 percent.