Numbers of Buyers Paying Cash for Their Homes Declines

While most homebuyers stretch their budgets to the limit to qualify for a mortgage, a number of purchasers pay cash for their new homes.

From February through April, a total of 3,251 Southland homes were bought with cash. That accounts for 8.9% of all residential purchases, down from 11% three years ago, according to La Jolla-based Dataquick Information Systems.

“People who pay cash are often older couples whose children have left home,” said Dataquick president Michael Ela. “These so-called ‘empty-nesters’ want something smaller and more manageable to live in. They sell the larger home, which is often paid off, and buy something smaller.”

Another group that accounts for a large portion of the cash buys is the wealthy, Ela said. “A lot of the most expensive homes in California, as well as second homes, are bought with no financing,” he said.

A large Santa Monica house sold in March for almost $6 million in cash, he said. Another home, a seven-bedroom, seven-bath home in Rancho Santa Fe went for $3.4 million cash, Dataquick reported.

San Diego County currently has the highest level of cash deals, followed by Riverside and San Bernardino counties. Dataquick monitors all real estate transactions statewide and provides real estate information to lending institutions, title companies and industry analysts.