Dwindling REO Sales Blunt Importance of All-Cash Transactions

Cashrnsales continued to decline in importance in September.  These sales, which represented close to halfrnof all home sales when foreclosures and lender owned real estate (REO) were atrntheir peak, have now fallen to just over a one -third share.</p

CoreLogicrnsaid on Tuesday that 34.8 percent of home sales were all cash inrnSeptember.  While this was up onernpercentage point from August, on a year-over-year basis these sales haverndeclined for 21 consecutive months.  InrnSeptember 2013 cash sales had a 37.2 percent share.  CoreLogic said that comparisons of these salesrnshould be made on an annual basis because of the seasonal nature of the housingrnmarket.</p

Atrntheir peak in January 2011 cash sales made up 46.4 percent of all homernsales.  In the years prior to the housingrncrisis the portion of these sales averaged about 25 percent. </p

REOrncontinues with the largest share of cash sales, 58.1 percent in September.  The percentage of cash sales among REOrntransactions remains high but as the volume of those sales has retreated theyrnhave had less and less impact on overall statistics. In September 2014 only 7.8rnpercent of sales were of previously foreclosed property whereas in January 2011rnthose sales made up nearly a quarter of all closed transactions.  </p

Re-salesrnhad the second highest percentage of cash transactions (34.4 percent) withrnshort sales next at 32.4 percent.  Salesrnof new homes trailed at 16.8 percent.</p

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Amongrnthe states Delaware led with a cash share of 57.4 percent, followed by Floridarn(50.8 percent), Alabama (49.6 percent), New York (44.4 percent) and Idaho (43.3rnpercent). Of the nation’s largest 100 Core Based Statistical Areas (CBSAs)rnmeasured by population four of the top five were in Florida led by Miami-MiamirnBeach-Kendall  (56.2 percent), followedrnclosely by West Palm Beach-Boca Raton-Delray Beach (55.9 percent), FortrnLauderdale-Pompano Beach-Deerfield Beach (54.8 percent), Cape Coral-Fort Myers,rnFla. (54.7 percent) and Detroit-Dearborn-Livonia (53.1 percent). At the bottom,rnthe Washington, DC area had a cash sales share of 16.2 percent.

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