27% of all Residential Housing Sales are CASH

The National Association of Realtors came out with a report recently that shouldn’t be surprising to agents who work with both buyers as well as sellers.  Approximately 27% of all sales in August were cash transactions.  That is to say, no loan was taken out on the property but rather 100% of the cost was paid at closing with good ol’ fashion cash! 

If you are a buyer who has such cash, good for you!  The chances of your offer being accepted by the seller are much, much higher as no loan or appraisal contingencies typically applies.  If you are a buyer competing against an all cash offer it can be quite disappointing and frustrating.    Cash is hard to beat.  And for what it is worth, I often see cash offers competing against other cash offers, thus driving prices up. 

Locally speaking, I did a little bit of research to see if San Diego was on the state average of cash transactions.  I pulled single family residential homes sales for the College, El Cerrito and Kensington neighborhoods over the last 30 days.  I found out of the 40 homes sold, 9 were all cash.  This gives us a 22.5% ratio of cash transactions over the last 30 days for 92115. 

Why is everyone paying cash? It can mostly be explained by tougher lending  standards, difficult appraisal issues, low inventory compared and high, high demand.  Demand for San Diego Real Estate has not been higher since our bubble burst in 2008/2009.  Such demand and such willingness of buyers to pay all cash for properties is driving the cost of real estate up.   Of the 9 homes which closed all cash in 92115, 4 of those sold for over list price.  Go figure….even cash offers have their fair share of competition!  Bottom line, it’s not an easy market out there, but one that is slowing turning into a red hot one!

 

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