The real estate market has been on fire for months. Historically low mortgage interest rates have boosted some of the demand. Additionally, as more people worked from home, some found they could move to places that they felt were cheaper to live in and had better quality of life. It has become clear that some companies will never bring people back to their offices. Additionally, the COVID-19 pandemic has not hit the incomes of mostly middle and upper class Americans very hard.
Demand has also tightened supply in some cities. Houses may only stay on the market for a few days. In some cases, buyers get more than one bid on their home. In fact, the possibility of closing immediately has become critical. This means that cash offers have become more attractive.
The number of all-cash purchases is at its highest level since 2014, according to a study by Redfin. The real estate search company looked at home sales for the first four months of this year based on county records. The figure rose to 30.0% for this period, from 25.3% in 2020. A real estate agent in a popular real estate market described the trend. Shauna Pendleton, an agent for Redfin in Idaho, said, “I have never seen so much money in the Boise housing market than I saw last year. I just sold a home for $ 700,000 to a cash buyer last week. All of the $ 700,000 came from his E * Trade account.
The cities with the highest percentage of shoppers paying in cash are largely along the Atlantic coasts and the Gulf of Florida. The highest figure is for West Palm Beach, one of the wealthiest resort areas in the United States. The percentage of all-cash buyers for the first four months of 2021 was 52.6%. It topped 85 other subways reviewed by Redfin. Naples (52.5%), North Port (49.4%), Port St. Lucie (46.2%), Palm Bay (44.1%), Cape Coral (44.1%) and Jacksonville (40, 1%) are other Florida cities with large cash purchases.
Dina Blau, Redfin real estate agent in the West Palm Beach area, noted, “Florida is a big second home market and second home buyers often pay in cash. During the pandemic, people also flocked to Florida to buy primary homes. They sold their homes in New York, New Jersey, Chicago, or California and used the proceeds to pay cash for properties in Florida.
Will the trend continue? Like most other large transactions right now, whether in cars, boats or homes, the economy will continue to be the engine. If gross domestic product continues to grow at 5% per quarter, unemployment continues to decline, and the horror of the COVID-19 pandemic continues to improve, cash sales are expected to remain near their historic highs.
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