The importance of cash in home sale transactions declined in April for the 28th consecutive month. CoreLogic said on Thursday that all-cash home purchases comprised 33.7 percent of all sales during the period, down from 37.4 percent a year earlier. Month-over-month the share fell by 0.9 percent.
Cash purchases typically account for about one quarter of home sales but, as overall sales declined and investors became a major force, cash accounted for 46.5 percent of home sales at the peak in January 2011. CoreLogic said if the cash sales share continues to fall at the rate it did in the current report period the share should return back to the 25 percent pre-crash levels by mid-2017.
Cash sales continue to dominate in the distressed market; the share of all cash REO sales increased year-over-year in April to 56.6 percent. One-third of resales were all cash, 30.4 percent of short sales, and 15.3 percent of newly constructed home purchases. As REO sales decline, they made up only 7.4 percent of home sales in April, their predominance of cash sales has less effect on overall numbers. In January 2011 when the cash sales share was at its peak, REO sales made up 23.9 percent of total home sales. Eighty-one percent of April’s sales were in the resale category which therefore has the biggest impact on the total cash sales share.
Florida had the largest cash sales share in the nation at 51.4 percent followed by Alabama (48.5 percent), West Virginia (48.3 percent), New York (45.4 percent) and Kentucky (41.4 percent). Among the largest 100 Core Based Statistical Areas four in Florida, West Palm Beach-Boca Raton, North Port-Sarasota, Cape Coral-Fort Myers and Fort Lauderdale all topped 50 percent in cash sales as did Detroit. Syracuse, N.Y. had the lowest cash sales share at 11.0 percent.
Senior Director, Coldwell Banker New Homes Division
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