Cash purchases by investors on the rise
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One point mentioned in Tuesday’s L.A. Land post about investor Bruce Norris buying up homes in the Inland Empire was the use of all-cash transactions in making these purchases.
Is all-cash buying a trend? It certainly seems to be on the upswing. From Wednesday’s Wall St. Journal article, ‘Bargain-Hunters Descend, Cash in Hand’:
Falling home prices are spurring an increase in all-cash home sales in markets that have been hardest hit by the foreclosure crisis, an indication that bargain hunters have descended on the markets looking for deals. Homes financed with cash comprised one-third of sales in Phoenix last month, up from 19% one year ago, according to a report by Raymond James & Associates Inc. In Sacramento, Calif., all-cash sales accounted for 24% of total home sales last month, up from 8% in January 2008 and 3% in January 2007, according to the Sacramento Association of Realtors. Sacramento and Phoenix have each seen home prices fall by one-third in the past year.... In some cases, cash buyers are finding that they can get a deeper discount by making an all-cash offer.
All-cash investors will surely be less likely to walk away than their heavily leveraged counterparts from the boom years. Seems like an upside for the neighbors to me.
--Lauren Beale
Thoughts? Comments?
Related post:
Southland investors revisit buy and hold strategy
