More US home buyers are paying in cash

Bloomberg

U.S. home buyers are increasingly paying in cash.

The share of all-cash deals rose to the highest since 2013 last year, while institutional investors, who usually account for many cash sales, retreated, according to data from real estate data analytics firm Attom. That suggests more regular buyers turned to self funding to dodge punishing mortgage rates.

It’s particular true in the Southeast, home of most of the 13 cities with a cash share above 50% last year in the Attom data. Augusta, Georgia, known for hosting the U.S. Masters golf tournament, topped them all with 72%.

Realtors in the region say many individuals who would have been priced out by Wall Street money a year ago are now able to step in, in particular buyers who made a profit selling property in more expensive parts of the U.S.

“It’s mostly people retiring, or people who have sold something in other parts of the country and made a lot of money off it and are

Real

From Page 4 able to pick up something here for cash,” said Heather Kruayai, a Redfin Realtor in Jacksonville, Florida, where the median home price is less than half that of California.

Roughly half of the offers Kruayai receives nowadays come from individual buyers.

Besides high mortgage rates, two major factors at play today help explain the jump in cash sales. Many places in Sun Belt states remain relatively affordable compared with the Northeast and West Coast, giving people who sold there an edge – and cash. And institutional investors, burned by the sudden turn in the market last year, pulled back from once-hot markets.

Home sales dropped last year amid rising interest rates and prices cooled from pandemicfueled highs. Investor purchases fell by a record 46% in the fourth quarter of 2022 from a year earlier, according to a report from brokerage Redfin.

In Atlanta, about 53% of homes sold last year were paid in cash, based on Attom data. Jasmine

$436,182

300 Locust Drive #20 –

Harris, a Redfin Realtor there, said she’s seeing people who sold their California home for half a million or a million dollars and purchased an Atlanta property for about $400,000.

Nowhere was the all-cash share higher than in Augusta, located about a two-hour drive east of Atlanta. The median sales price for a house in that city, at about $200,000, is well below the national average, according to Attom data.

“The large cash-sales levels in the Augusta metro could be connected, at least partly, to a relatively good home-flipping market,” said Rob Barber, chief executive officer at Attom.

Home to a military base, universities and power plants, Augusta is a big market for rentals and has attracted investors hoping to profit from that demand, said Clay Turner, a broker and Realtor in the area.

“The driver that started that craziness was a lot of Wall Street money,” said Turner. Today, investors are more focused on managing their properties rather

Porter

From Page 11 vate homeowners that have outgrown their 1,200-square-foot starter home to list their home for sale and move up to 2,000 square feet. There is no shortage of first-time FHA buyers pre-approved to buy homes under $600,000. The market needs more homes listed for sale to meet the demand ASAP. than expanding them. “That little flash in the pan in our market has settled.”

It’s not just in the South. In Las Vegas, the share of institutional investors dipped while all-cash sales continued to rise last year, Attom data show.

“We don’t see hedge funds purchasing anymore,” said Shay

Stein, a real estate agent for Redfin in the area. “I think a lot of investors, they’re wondering what the market is going to do.”

That creates opportunities for regular buyers, including those looking for a second home, a traditional driver of cash sales alongside investors.

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1839 Landmark Drive –

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Jim Porter, NMLS No. 276412, is the branch manager and senior loan adviser of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.