More buyers are paying cash for real estate. About 28 percent of sales were all-cash transactions last year, according to the National Association of REALTORS®. In October 2008, the rate was 14 percent for comparison.
Indeed, cash buyers made up more than half of all transactions in the Miami-Fort Lauderdale area alone last year, and about 42 percent were cash buyers in Phoenix in 2010–which marked a triple rate increase compared to 2008.
The more depressed the housing market, the higher the percentage of a cash deal, economists note.
Cash buyers can often get a 5 percent to 10 percent discount on the asking price of a home than a buyer using a mortgage because sellers often prefer cash deals since they close more quickly and it prevents a bank from changing its mind, says real estate pro Mohammed Siddiq in Fort Lauderdale, Fla.
“The prices were just irresistible,” said Richard Stoker, who paid cash for two condos in Miami Beach, Fla., and plans to close on one more soon. “Florida’s been hit pretty hard.”
Virginia Hall-Busch also couldn’t resist the bargains. She purchased a “short sale” historic house in Stone Mountain, Ga., for $52,500 (the home was originally on the market for $159,000).
“When you have a bad economy, it’s hard on lots of people,” Hall-Busch says. “But right now if you’ve got the money to put down on a house, long term it’s going to be good thing.”
Cities With the Most Cash Deals
The following are the cities with the highest percentage of homes purchased through all-cash deals in December 2010:
- Miami: 54.2%
- Las Vegas: 45.9%
- Tampa, Fla.: 44.6%
- Phoenix: 35.6%
- Stockton, Calif.: 29.1%
- Chicago: 23.4%
- San Diego: 23.1%
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