Cash sales represented nearly 35% of total home sales in September, but that share has been ticking downward year-over-year and may continue to do so in the future, according to a recent analysis from CoreLogic.
In September, cash sales made up 34.8% of total home sales, down from 37.2% in September 2013, notes CoreLogic in an Insights Blog published last week. As the year-over-year share has fallen each month since January 2013, this makes September the 21st consecutive month of declines.
On a monthly basis, however, the share of cash sales has ticked up by one percentage point, but CoreLogic notes that these sales share comparisons should be made on a year-over-year basis due to the seasonal nature of the housing market.
Before the housing market crisis, the proportion of cash sales relative to total home sales averaged approximately 25%—the peak occurring in January 2011, when cash transactions made up 46.4%of total home sales.
When it comes to sale type, instances of cash sales are more popular than others, especially for real estate owned (REO) transactions, which had the largest cash sales share in September 2014 at 58.1%, based on historical data as far back as January 2000. Re-sale deals followed (34.4%), joined by short sales (32.4%) and newly constructed homes (16.8%).
But while the percentage of REO cash sales were high, these types of transactions made up only 7.8% of total sales in September and, “therefore, did not have a large influence on the overall cash sales share,” CoreLogic writes.
States also differed amongst each other in having higher shares of cash sales than other in September 2014.
Delaware had the largest share of any state at 57.4%, followed by Florida (50.8%), Alabama (49.6%), New York (44.4%) and Idaho (43.3%).
Of the country’s largest Core Based Statistical Areas measured by population, Miami-Miami Beach-Kendall, Fla. had the biggest share of cash sales at 56.2%, followed by other metros in the state that also joined it.
West Palm Beach-Boca Raton-Delray Beach, Fla. reported 55.9% of total sales that were cash, followed by Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (54.8%) and Cape Coral-Fort Myers, Fla. (54.7%).
The metro with the lowest cash sales was Washington-Arlington-Alexandria, D.C.-Va.-Md. with 16.2% of total home sales.
Written by Jason Oliva