Cash Sales Surge; Distressed Sales Remain Elevated – RealtyTrac

RealtyTrac, which has historically reportedrnon the distressed home market, has now widened the focus of its U.S. Residential and Foreclosure SalesrnReport to a more general discussion of the national real estaternmarket.  The company reports that homesrnin the U.S. sold at an estimated annualized rate of 5.5 million units in July,rna 4 percent increase from the previous month and 11 percent higher than in Julyrn2012.  The year-over-year increase inrnsales was the largest so far this year.  </p

Of particular note in the RealtyTracrnreport was data on cash sales.  The companyrnfound cash transactions accounted for 40 percent of all sales in July comparedrnto 35 percent in June and 31 percent in July 2012.   There were especially notablernmonth-over-month increases in cash sales in some cities; Dallas was up 82rnpercent, St. Louis 66 percent and Los Angeles 32 percent.   </p

The national median sales price wasrn$174,500 in July, a 4 percent increase from June and 6 percent from thernprevious year.  July marked the 16^{th</supconsecutive month median home prices have increased.  The median price of a foreclosed home was discountedrn37 percent from the median price of a non-distressed sale to $120,000, 1rnpercent above the June median but down 1 percent from a year earlier. </p}

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While sales volume continued tornincrease nationwide, eight states posted annual decreases in total sales,rnincluding California (-17 percent), Arizona (-11 percent), Nevada (-7 percent),rnand Georgia (-2 percent). Those four states also posted the four biggest annualrnincreases in median home prices in July: California (+31 percent); Nevada (+27rnpercent); Arizona (+21 percent); and Georgia (+20 percent). </p

“Low inventory of homes availablernfor sale is proving to be a double-edged sword in many local housing marketsrnthat have bounced back quickly from the real estate slump,” said DarenrnBlomquist, vice president at RealtyTrac. “Home prices are accelerating rapidlyrnin these markets thanks to the combination of low supply and strong demand.rnHowever, counter to the national trend, sales volume in these markets is downrneven as the percentage of cash sales rises, indicating there is still strong demandrnbut that buyers who need financing to purchase are increasingly left out in therncold.</p

“The recent uptick in interest ratesrncould also be contributing to a higher percentage of cash purchases as somernnon-cash buyers can no longer afford to buy, particularly in high-pricedrnmarkets,” Blomquist added.</p

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Sales of distressed propertiesrncontinue to hold a significant share of the market.  Short sales accounted for 14 percent of allrnresidential sales in July, up from 13 percent in June and from 9 percent inrnJuly 2012 while sales of bank-owned properties (REO) accounted for 9 percent ofrnsales, the same percentage as both the previous month and a year ago. </p

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Institutional investor purchasesrn(sales to non-lending entities that purchased at least 10 properties in thernlast 12 months) also accounted for 9 percent of all residential sales in July, arnpercentage that was also unchanged from both the previous month and the samernmonth in 2012.  Institutional investorsrnwere particularly active in Atlanta where they accounted for 25 percent ofrnsales, Tampa (22 percent), Palm Bay, Florida. (20 percent); Greenville, South Carolina,rn(19 percent); and Charlotte, (19 percent).

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