The majority of Florida home purchases were cash transactions in June. That’s according to a new report from California-based real estate analysis company CoreLogic.
Mark Fleming, chief economist at CoreLogic, says the recession and housing bust have resulted in a spike of cash buyers.
“Either because they don’t want to have the mortgage debt burden or, in many cases can’t qualify for mortgage loans,” Fleming says.
In June, just about 51 percent of Sunshine State home sales were cash purchases, the highest rate in the nation. According CoreLogic’s report, the top five markets for cash sales were all in Florida:
Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Cape Coral-Fort Myers, Fla. had the highest share of cash sales at 61.2 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (60.6 percent), North Port-Sarasota-Bradenton, Fla. (59.8 percent), Miami-Miami Beach-Kendall, Fla. (58.7 percent) and Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. 58.5 percent).
The Florida real estate market is naturally more cash-friendly, says Fleming. When people are buying second and third homes, there’s a good chance they’re buying in cash. But he thinks the rate is higher than normal because the lower end of the market is also trading in cash.
The owners of foreclosed or distressed properties are often institutions, says Bill Hardin, head of Florida International University’s real estate program. Those sellers don’t necessarily care if a potential buyer can come in $10 or $20,000 higher with a mortgage.
“They just want to dispose of that asset because they’ve acquired it at a certain price. They know they can sell it and make a certain return,” says Hardin. “So their goal is to get in and out of that asset, in many cases as quickly as possible.”
Because of this, Hardin says, locals looking to buy and live in a home may be feeling squeezed right now.
