Lately I noticed that the number of buyers needing financing has drastically reduced. My personal feeling was confirmed by a recent study from RealtyTrac Inc showing that Florida is the nation’s leader with an amazing rate of all-cash home sales of 66 %! Even more impressive is the 69% rate of cash deals in Miami. To give you an idea, among all the other States, only Nevada with 64% and Maine with 60% got the next closest numbers of cash closings.
Several reasons explain the shortage of the home-loan mortgage market. First of all, the tightening of the mortgage industry has made it more difficult for a buyer to obtain a loan. Then since the market has picked up, sellers often receive multiple offers for the same property. Of course the cash offer is the one that is selected by the seller who wants to avoid delays and uncertainty caused by the lending institution. Finally, 10% of all sales are still foreclosures and banks rarely accept an offer with a financial contingency.
Another key shift noted in the study is the category of buyers in Florida. A few years ago, a large percentage of investors were private-equity firms who purchased bulk packages of houses, remodeled them and rented them out. Nowadays, the typical purchaser is a second home or a retirement home buyer.
These numbers and this wave of cash-only buyers confirm that the real estate market looks healthier than it has ever been!