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Housing: Increase in Cash Buyers

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From Mitra Kalita at the WSJ: Cash Buyers Lift Housing

Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year … In the fourth quarter of 2006, they represented just 13% of deals.

The percentage of buyers in Phoenix paying cash hit 42% in 2010—more than triple the rate in 2008 … Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008 …

This is a quite an increase in cash buyers. Most of the cash transactions are at the low end – and are frequently investors – although the article mentioned one buyer paying cash for + million properties.

The good news is these buyers won’t ever have negative equity!

Note: The MBA mortgage index is suggesting weak home sales over the next couple of months, but obviously that index doesn’t capture this increase in cash buyers.

Calculated Risk

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