More than 1 in 3 Home Sales All-Cash; Declining Slowly

By: Jann Swanson • Mon, Mar 9 2015, 1:09 PM

The share of all cash sales continue to fall in December along with the volume of distressed property sales. CoreLogic said on Monday that 35.5 percent of total home sales in December were all cash, down from 38.5 percent from December 2013 and 0.5 percent lower than just a month before. The share of cash sales has fallen year-over-year since January 2013, making December the 24^th straight month of declines.

Cash sales peaked at 46.5 percent of all sales in January 2011 and are now about half-way back to the average that existed prior to the housing crisis - approximately 25 percent. CoreLogic projects that should cash sales continue at the December rate of decline these sales should be back to that quarter-share level by mid-2017.

Sales of lender owned real estate (REO) continue to be predominantly cash sales - 58.4 percent in December. But as the share of REO falls, so does the influence of those sales on the overall numbers. Sales of REO made up only 8.8 percent of sales in December compared to a 23.9 percent share when cash sales were at their peak. Cash transactions made up 35.4 percent of resales, 32.7 percent of short sales, and 15.6 percent of sales of newly constructed homes in December.

The highest proportion of cash sales in December were in Alabama at 52.2 percent followed by Florida at 50.3 percent. Florida is still in the throes of a foreclosure crisis, but both states are also popular destinations for retirees who may be buying real estate with cash pulled out of their pre-retirement homes. Other states with high levels of cash sales were New York (45.9 percent), Michigan (44.6 percent) and Idaho (42.9 percent).

Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Detroit-Dearborn-Livonia, Mich. had the highest share of cash sales at 65.9 percent, followed by Miami-Miami Beach-Kendall, Fla. (58.3 percent), West Palm Beach-Boca Raton-Delray Beach, Fla. (57.2 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (56.3 percent) and Cape Coral-Fort Myers, Fla. (55.6 percent). Syracuse had the lowest cash sales share at 15 percent.