Posted on 01/23/2014 2:05:35 PM PST by Lorianne
Back in August, when we wrote that "A Stunning 60% Of All Home Purchases Are "Cash Only" - A 200% Jump In Five Years" based on Goldman data, many laughed, unable to fathom that the majority of the US housing market has become a flippers' game played by institutions and the uber wealthy, who don't need a stinking mortgage to buy that South Beach mansion. The implication of course being that housing is not effectively shut for that part of the population - the vast majority - that relies on credit to be able to purchase a home (a finding confirmed by the ongoing collapse in mortgage applications).
As it turns out we were just a little ahead of the curve as usual, and as real estate company RealtyTrac reported overnight, with data that naturally is delayed due to the delayed impact of houses coming out of the much delayed foreclosure pipeline, "All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from a revised 38.1 percent in November, and up from 18.0 percent in December 2012." That's a 10% increase in one month for a 6-9 month delayed series, which means that in reality, roughly about 60% of all homes are now purchased with cold, hard cash.
(Excerpt) Read more at zerohedge.com ...
Please, God, send ‘em to Everett. We still haven’t recovered from the housing bubble crisis and the houses are boarded up. Some have been condemned for very minor things. Others attract squatters, usually drug users a d sellers and other criminals. The titles are held by people in faraway places who don’t care about Everett.
Just bought one today in cash to flip. And I’m not uber wealthy.
Evertt Wa.?
There are three or four “flip” shows on HGTV again. Not every one is on every week, but they’re back.
Tax slaves seeking freedom.
Lots of money from overseas. South America, Asia, etc.
The records can be deceiving. There’s a LOT of double-wide mobile homes in over-55 developments in Florida, that are under $25,000. For that matter, how does a $500 single-wide sound? Lot of them. The issue is that they are in over-55 developments and have 300-600/month HOA dues. Makes them difficult to sell and are often sold for cash.
They are reported as SFR sales, which skews the sales data.
That is what happened in Texas back in the 1990s when Californians sold out, moved to Texas and Colorado, bought the same size home as in California but then still had lots of cash left over to start Califoricating Colorado and Texas.
The American Dream is now an all-cash offer from a never-seen Chinese money launderer, so you can “retire” to a smaller place in a more remote area, and try to scrape by while you watch the clock run out.
Here, too. People who sell in California or New York can buy palaces in the Great Charlotte Metroplex-cum-Chicken Farm.
Yes, I think the article misses this point. Not all of the all cash purchases are from large investment groups or wealthy investors.
Also, I wonder how much of this is people having no safe place to harbor their money? If you’re making 1% or less in savings vehicles and don’t want to risk the stock market or metals, where else can you invest ?
More likely, it's that blue curve. Interesting how a minor uptick in the 30-year rate coincides with a major jump in the green bar height.
I'd really like to know how much of the green is owner-occupied.
Yes, that's an important number.
I suspect that number is very low.
I looked at rents in my area the other day, and they are high. I guess there’s money to be made in rental property again. Sometimes I think about buying a vacant house on my street to use as a rental, but I always decide it would just be too much trouble.
You hit the nail on the head. The money is making less than 1% in the bank. This is our fourth house to flip. We usually work on the house about 4 months and sell it and then clear over $20,000 after all expenses and taxes. We won’t do one unless we clear $20K, because our labor is worth something.
I suspect many of these purchases were executed by those working in the cash oriented pharmaceutical business.
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