Last November, 38.1 percent of single family home and condo sales were all-cash, up from 29.8 percent in October, according to a new report from RealtyTrac.
RealtyTrac vice president Daren Blomquist said the uptick in cash sales is temporary, caused by new federal rules that change how the costs of a loan are disclosed.
Blomquist said those changes slowed down the loan process, and that meant “cash buyers have an even bigger leg up on finance buyers than they did before.”
But Blomquist said once everybody gets used to the new rules, cash sales will slip back to around 30 percent, the norm since 2000. But there’s a caveat, “In terms of global economic stability,” he said.
That’s a big caveat. More and more wealthy foreigners are paying cash for U.S. real estate, as a hedge against their own tanking economies. Some economists say that’s not about to stop.
“I don’t see any bottom to the Chinese meltdown,” said Anthony Sanders, a distinguished professor of real estate finance at George Mason University. “So I think this could, actually, very easily last through the year.”
But mainly on the coasts, in cities like Los Angeles, New York and Washington.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?