Cash Sales Retain Elevated Share of Market

While the both the investor share of home sales and the share represented by distressed properties are setting post-crash lows, the share of cash sales remains elevated.  CoreLogic reports that in May cash sales represented 30 percent of home sales.  While this was down 1.7 percentage points from April and was 2.5 points lower than a year earlier, it remains 5 points higher than the average before the housing crisis.

Cash transactions peaked at 46.6 percent of home sales in January 2011.  CoreLogic estimates that, at the current rate of decline, it will return to a 25 percent share by mid-2018.

REO sales continue to have the largest cash share, 56.6 percent in May.  However only 5.1 percent of home sales during the month were from lender inventories, down from about a quarter of sales when cash sales peaked.  At the low current level of REO sales, the high ration of cash sales in that sector no longer has much impact on the overall share. The cash share of resales was 29.8 percent, short sales had a 27.9 percent share and newly constructed homes 14.6 percent.  

Alabama continues to have the largest cash sales share of any state at 45.2 percent, followed by New York (45.1 percent), Florida (42.4 percent), New Jersey (36.4 percent) and Indiana (36 percent). Of the nation's largest 100 Core Based Statistical Areas (CBSAs) by population the highest share was in Detroit at 53.4 percent, followed by West Palm Beach-Boca Raton (52.3 percent), Philadelphia (52 percent), Sarasota-Bradenton, (50.3 percent) and Fort Myers (49.3 percent). Syracuse, N.Y. had the lowest cash sales share at 13.7 percent.