a steadily decreasing share of distressed sales and fewer investors in the
market all-cash sales have not yet returned to normal levels nor, according to CoreLogic’s
new report, will they for nearly two more years. Those sales made up 30.8 percent of all home
sales in July, down from 34.2 percent in July 2014.
year-over-year share of all-cash sales has fallen each month since January 2013
and July’s were at the lowest level in nine years. Such sales peaked in January 2011 when they
comprised 46.5 percent of the national market.
the share was down 0.5 percentage points.
CoreLogic says the seasonality of the market makes year-over-year
comparisons most meaningful.
decline in cash sales has paralleled the drop in sales of lender owned
properties (REO) which now constitute only 6.1 percent of home sales. Thus, even though REO had by far the largest
percentage of cash sales, 56 percent, those sales had little impact on the
market as a whole. In January 2011 when
the cash sales share was at its peak, REO sales made up 23.9 percent of total
home sales. Resales had the next highest cash sales
share at 30.2 percent, followed by short sales (28 percent) and newly
constructed homes (15.6 percent).
Cash sales remain well above the
national average in several states. Alabama
had the largest share at 47.4 percent, followed by Florida (44.7 percent), New
York (42.8 percent), West Virginia (41.1 percent) and New Jersey (39.5 percent).
Of the nation’s largest 100 Core Based
Statistical Areas (CBSAs) measured by population, those with the highest cash
sales were all in Florida; West Palm Beach-Boca Raton at 53.2 percent, Miami (52.2 percent), Sarasota-Bradenton, Fla. (50.1
percent), Fort Lauderdale-Pompano Beach (48.4 percent) and Cape Coral-Fort
Myers (47.9 percent).
Prior to the housing crisis, the cash
sales share of total home sales averaged approximately 25 percent. If the cash
sales share continues to fall at the same rate it did in July 2015, the share
should return to that level by mid-2017.