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Tuesday, March 1, 2011

Cash-only home sales rise in California

Cash sales usually mean, but not always mean investors.  My question is that after cash purchases what happens when people need to get a loan?  Will we see another price drop?
All-cash buyers grabbed a record 30.9% share of California house and condo sales in January. In Southern California's most expensive communities, cash deals now account for as much as two-thirds of home sales
Here's the analysis from DataQuick
The trend is being driven by several factors, analysts say, including the difficulty of getting a "jumbo" loan from lenders still stinging from the mortgage meltdown. It also reflects speculation by wealthy investors who believe home prices are at or near a bottom.
"A lot of people think housing will outperform other financial investments," said Andrew LePage, a DataQuick analyst. "This is just a place to park their money."
In the Southland's $1-million-and-up market, 29.2% of buyers paid cash last year — the highest percentage since 1994, DataQuick statistics show. For homes selling for $5 million and up, 62.2% paid cash.
Read it all

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