Cash Buyers: Crush it With Cash in Today’s Market

As interest rates climb steadily, so do the number of real estate cash purchases that are taking place. In addition to rising interest rates, big investment opportunities are ripe for the picking in some markets and thus have become a significant contributing factor, as well. Finally, given their propensity to pay for real estate purchases with cash, in whole, and up front, institutional investing has also been a huge contributing factor in these trending cash buy occurrences.

Up a whopping 31% year over year from 2012, traditional financing accounted for only a little over 60% of new home purchases in July.

The rest are all real estate sales to cash buyers.

Among the states that had the highest incidences of cash real estate purchases, those that were hit the hardest by the housing crises have risen to the top. Likewise, most of the states in the cash buyer category had the highest peaks of institutional buying.

In a recent interview with 24/7 Wall St., RealtyTrac CEO Daren Blomquist said, “By nature, with distressed sales, besides the fact that it’s low-priced, when you buy a foreclosure property at the public foreclosure auction, in most states, you do have to pay cash there. No matter what the price, you do have to pay cash,”

This is all great news for real estate investors and those who are smart will keep their eye on the top ten states for cash sales, as reported by RealtyTrac:

1. Florida
   Cash sales: 65.8%
   Median list price: $159,900
   Institutional sales: 14.4%
2. Nevada
   Cash sales: 64.4%
   Median list price: $185,000
   institutional sales: 15.6%
3. Maine
   Pct. cash sales: 59.5%
   Median list price: $209,950
   institutional sales: 3.3%
4. Michigan
   Cash sales: 53.1%
   Median list price: $129,900
   Pct. institutional sales: 10.5%
5. South Carolina
   Cash sales: 49.9%
   Median list price: $164,039
   institutional sales: 13.7%
6. Georgia
   Cash sales: 49.5%
   Median list price: $169,500
   institutional sales: 22.2%
7. Arizona
   Cash sales: 47.8%
   Median list price: $192,500
   institutional sales: 14.6%
8. Ohio
   Cash sales: 47.0%
   Median list price: $118,900 (the lowest)
   institutional sales: 7.0%
9. New Jersey
   Cash sales: 45.0%
   Median list price: $279,900
   institutional sales: 3.1%
10. Hawaii
    Pct. cash sales: 44.3%
    Median list price: $429,900
    institutional sales: 2.3%