Posted on 08/29/2013 6:48:49 AM PDT by KeyLargo
Edited on 08/29/2013 6:53:23 AM PDT by Admin Moderator. [history]
More Americans are buying homes in all-cash deals, according to several recent studies. But real- estate experts say this increase may not be a good sign for the health of the housing market.
All-cash purchases accounted for 40% of all sales of residential property in July 2013, up from 35% during the previous month and 31% in July 2012, according to data from real-estate data firm RealtyTrac released Thursday. That
(Excerpt) Read more at marketwatch.com ...
The Insiders:
Bad news is good news for the Obama economy
By Ed Rogers, Updated: August 26, 2013
The Obama administration is stuck in a surreal world, where bad news is good news for the economy it has created. Trickle down from the stock market and artificially low interest rates are the only drivers of the economy. The second-estimate gross domestic product report this week will be vital to the life-support system that President Obama has constructed for the 1 percent. If the revised GDP numbers are good – relatively speaking – it will suggest that bond-buying by the Federal Reserve will be tapered in the near future. If the tapering begins, the stock market is going to fall. If the stock market falls, the wealth effect and the trickle-down that stock market boom has produced are going to dry up.
Pretty amazing if true, I know we are in no position to pay cash for a home, and I’ve made right around 100,000K for a few years now. Our newest car is a 2006. At 15,000 I paid more for that car than all the others I’ve bought combined. We own our home and two quarters of land. Last child is a junior in college.
Who is it that has enough cash to buy a home?
In my area investors have been scooping up low priced homes for cash on speculation. They have pretty well cleaned out the inventory of low priced properties and have moved up to to properties priced a little higher, driving the reported average sale price up slightly.
That has the local politicians giddy and predicting an end to the Obama depression.
The unemployed and marginally employed aren’t buying houses and they certainly aren’t paying cash.
But the administration is doing its best to create another bubble with its mortgage programs.
Whole lotta short selling goin’ on aroun’ h’yah!
“Who is it that has enough cash to buy a home?”
“Although RealtyTrac doesn’t identify who has cash-in-hand, experts say wealthy Americans and downsizing retirees account for some of these all-cash deals. Investors who are keen to make a profit by buying low and renting those properties – or flipping them – also drive up the number of all-cash deals,”
“Some of these cash buyers are baby boomers who’ve managed to build up equity through previous real estate purchases. Others are investors, many of them flush with money from China and other ventures overseas. Riccardo Ravasini of Rava Realty, who handles properties in Florida and New York, says Manhattan in particular sees a lot of cash buyers, since it’s a “special market that appeals to the entire world.”
“There’s no exact way to know who is responsible for all of these cash purchases, though they are likely to include some combination of investors, foreign buyers, and wealthy homeowners that don’t want to go through the hassle of getting a mortgage before closing on a sale. Mortgage lending standards have sharply tightened up since the housing bubble, with banks scrutinizing borrowers’ tax returns and bank statements to verify their incomes and the source of their down payment.”
http://www.doctorhousingbubble.com/cash-buyers-real-estate-all-cash-buyer-percent-of-market/
Individual real estate investors, comprise most home purchases with cash, making up 16 percent of homes in July, lower than the 17 percent in the previous month after pole jumping to a cyclical peak of 22 percent in February 2013.
I guess I am one of the guilty ones except I bought the first week of August. Got it on the market as rental property.
Not surprising. People want to have something of real value before the dollar is totally worthless.
A Stunning 60% Of All Home Purchases Are “Cash Only” - A 200% Jump In Five Years
Submitted by Tyler Durden on 08/15/2013 17:29 -0400
“Finally, due to the very thin marginal source of bidside interest (flipper flipping to flipper and so on), it means that most of America has not participated in this mirage “recovery”, and all it will take to send the buoyant housing market crashing is for the one marginal buyer to become a seller. What they will next find, is that when dealing with a bidside orderbook that has zero depth, one indeed takes the escalator down from where the lofty heights achieved courtesy of Fed-funded stairs. “
I suspect most of these are investors.
With super low interest rates, hedge funds are scooping up hard assets. They know eventually inflation is gonna spike.
My daughter’s starter home in a good school district here in Indiana was purchased by a Cali hedge fund and turned into a rental property.
They buy up enough houses to support a local manager who oversees the rental op.
My son works in banking, it absolutely IS true. Where I live, it's closer to 50%.
It's mostly older people, who are downsizing for retirement. They have a lot of equity in the home they're selling... using it to pay cash for smaller houses.
It's that, and... people speculating on foreclosures, that are FAR less expensive than normal houses..
Many around here, in the inner city areas, are selling for $10-50K. Then, the new owner rents it out to poor minorities, who are on Section 8 Federal housing support.
The renters then rent out rooms, for cash... and, EVERYONE makes money... thanks to Good 'Ol Uncle Sam.
IT's a helluva RACKET!
Wall Street bundlers using bailout cash from the taxpayers, again ?
I’m a Realtor and had 3 cash deals last month. $600,000, $340,000 and $235,000. Very unusual.
Investors Beating Out Homebuyers With Cash
By: The Associated Press
By Alex Veiga, AP Real Estate Writer
LOS ANGELES (AP) — Melissa Hughett and her husband set out to buy their first home in the best buyer’s market in years, confident they would land a deal within a few months.
The couple put offers on several homes, but lost them all to rivals who weren’t offering more money — just a lot more cash.
“Each time somebody came in and put $100,000 down in cash and scooped up the property or they had enough money to pay for the whole property in cash,” said Hughett, 30. “It’s agonizing.”
Would-be homebuyers, armed only with financing, are competing with real estate investors with the means to pay for a home in cash. Often, the all-cash buyers are edging out everyone else, leaving many frustrated at a time when lower prices and tax incentives favor buyers.
The market scuffle is happening primarily over heavily discounted foreclosed homes and other properties typically less than $300,000, or even well below $100,000 in some markets. These homes are attractive to investors seeking a good return and first-time buyers looking for an affordable home.
The trend is most pronounced in areas of California, Florida, Arizona, Nevada and elsewhere where home prices have dropped sharply and foreclosures make up a large slice of homes for sale in many metro areas. In Las Vegas and Phoenix, for example, foreclosures accounted for more than half of all home resales in December, according to MDA DataQuick.
Although getting financing for heavily damaged foreclosures can be difficult, there’s still a healthy competition. Ultimately, cash is king.
http://www.bankingmyway.com/real-estate/investors-beating-out-homebuyers-cash
Speculators and foreigners looking for safety from their own bubble economies and central banking machinations.
“More Americans are buying homes in all-cash deals, according to several recent studies. But real- estate experts say this increase may not be a good sign for the health of the housing market.”
So, the issue isn’t home sales - it’s financing that drives the economy. Sounds just like the drive to buy around Christmas time.
“Who is it that has enough cash to buy a home?”
I sold my shack in RI and was able to pay cash for a mansion in Texas. OK it wasn’t a mansion but it was a new home with more square footage so it was a mansion to me. My house in Texas is already worth $40,000 more than I paid for it 2 years ago and the house I sold in RI is worth $65,000 less than I sold it for 4 years ago.
Primary residences or investment buyers?
Up until a couple of years ago, I would not have thought people would have the cash. Then the oldest members of our family started dropping like rocks. A couple of million dollars transferred to our generation. (Not all to me...unfortunately).
As the executor of the estates, I can tell you there are five folks in New England who could walk into 90% of the homes on the market and plop down cold hard cash.
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