Cash Sales Declining, but Remain Elevated For REOs

The percentage of all-cash home salerntransactions declined for the 25^th consecutive month in January,rnfalling to a 38.9 percent share. rnCoreLogic said that this was a 2.6 percent decrease from January 2014rnwhen cash sales accounted for 41.4 percent of sales.</p

Cash sales peaked in January 2011 at a 46.5rnpercent share, close to double the share prior to the housing crisis.  CoreLogic said that if cash sales continue tornfall at the same rate it did in January it will reach the “normal” rate of 25rnpercent in mid-2018.</p

The January share of cash transactions didrnrise from December, up 3.2 percentage points. rnCoreLogic called a January increase typical, exemplifying thernseasonality of the market and the reason why cash sales comparisons should bernmade on a year-over-year basis.     </p

Cash continues to dominate in sales ofrnlender-owned property (REO) accounting for 60 percent of those transactions inrnJanuary.  Cash transactions made up 34.5rnpercent of short sales, 38.4 percent of re-sales, and 17.3 percent of new homernsales.  One reason the overall share ofrncash sales has declined has been the shrinking role of REO which made up onlyrn9.9 percent of sales in January.  At therncash-sale peak REO sales were 23.9 percent of the market.</p

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Florida had the largest share of cashrnsales at 56.3 percent, followed by Alabama (54.7 percent), New York (48.2rnpercent), Indiana (47.4 percent) and Missouri (47 percent). Of the nation’srnlargest 100 Core Based Statistical Areas (CBSAs) by population,rnDetroit-Dearborn-Livonia had the highest share of cash sales at 65.6 percent,rnfollowed by four Florida metro areas; Miami-Miami Beach-Kendall (59 percent),rnWest Palm Beach-Boca Raton-Delray Beach (58.4 percent), Cape Coral-Fort Myersrn(58 percent) and Fort Lauderdale-Pompano Beach-Deerfield Beach (57.6 percent).rnWashington-Arlington-Alexandria, D.C.-Va.-Md. had the lowest cash sales sharernat 16.2 percent.

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