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Cash Sales Jump to 45 percent in August

by devteam September 26th, 2013 | Share

Distressed homes accounted for 25rnpercent of residential home sales in August, up 2 percentage points fromrnJuly.  RealtyTrac, in its August U.S. Residential and Foreclosure SalesrnReport, said that short sales and sales of bank-owned properties (REO) eachrnrose one point from their July numbers to 15 percent and 10 percentrnrespectively.  </p

The big news, however, was the growingrnlevel of all-cash sales which are rapidly approaching half of all residentialrnreal estate transactions.  Those salesrnrose to a 45 percent share in August, up from 39 percent in July and 30 percentrnin August 2012.   The percentage of cashrnsales was even higher in some metropolitan areas such as Miami (69 percent), Detroit (68 percent), Las Vegas (66 percent),rnJacksonville, Florida (65 percent), and Tampa (64 percent).</p

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Thernnumbers of institutional investors, those who have purchased at least 10rnproperties in the last 12 months, are also increasing and accounted for 10rnpercent of all sales in August compared to 9 percent both in July and one yearrnearlier.  Memphis, Jacksonville, andrnAtlanta appear particularly attractive to these large investors with thosernpurchases representing respectively 31, 29, and 22 percent of local sales.</p

RealtyTracrnsaid homes (including single-family residences, condos, and townhomes) sold atrna seasonally adjusted annual rate of 5.6 million in August, up 2 percent fromrn5.5 million in July and 12 percent higher than the 5.0 million pace in Augustrn2012.  </p

The national median sales price inrnAugust was $175,000, up 3 percent from the previous month and up 6 percent fromrna year ago.  The company said this markedrnthe 17th consecutive month of annual price increases.  Distressed property sold at a median price ofrn$116,000, 1 percent higher than in July but down 3 percent from Augustrn2012.  Distressed home sales includingrnREO and short sales have now seen year-over-year median prices decline for sixrnstraight months. </p

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“Seven years after the housingrnbubble burst, U.S. home prices are clearly on the rise again, up 23 percentrnfrom the bottom in March 2012 although still 26 below the peak of the housingrnprice bubble in August 2006,” said Daren Blomquist, vice president atrnRealtyTrac. “This recovery in home prices and sale volume continues to berndriven in large part by cash buyers and institutional investors, as evidencedrnby the increasing share of sales represented by those two categories inrnAugust.”</p

Sales volume increased from thernprevious month in 39 out of the 42 states tracked in the report and was up fromrna year ago in 37 states, including Texas, (31 percent), Illinois (29 percent), andrnPennsylvania (28 percent), Virginia (up 26 percent), and Florida (up 22rnpercent). Notable exceptions where sales volume decreased from a year agornincluded California (-17 percent), Arizona (-12 percent), and Nevada (-6rnpercent)</p

States with biggest annual increasesrnin median prices include California (32 percent), Nevada (26 percent), Georgiarn(21 percent), Arizona (20 percent) and New York (19 percent).

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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