More People Pay Cash for Homes

While most people still stretch their finances to the limit to qualify for a mortgage, an increasing number of Southland home buyers are paying cash for their new residences, a real estate information service reported.

A total of 6,165 residential purchases were made with no financing during the second quarter, 10.5% of the region’s 58,723 home sales, according to La Jolla- based Dataquick Information Systems.

The percentage was up from 9.5% for second quarter, 1993.

“With home prices as low as they are these days, your bargaining position is very strong if you don’t need to arrange financing,” said Dataquick CEO Donald Cohn.

“Another part of the cash market are older couples whose children have left home. These so-called ‘empty-nesters’ often sell a larger home, which is paid off, and buy something smaller. They invest the difference for retirement,” Cohn said.

Percent of All-Cash Home Sales

Percentage of second quarter home sales where buyer did not finance purchase.

County 1993 1994 Los Angeles 5.7% 9.1% Orange County 7.0% 9.4% San Diego 13.8% 11.2% Riverside 16.2% 16.2% San Bernardino 15.0% 12.6% Ventura 5.8% 8.1% So. Calif. Total 9.5% 10.5% All California 9.1% 11.2%