A third of home sales in March were all-cash transactions according to CoreLogic. This was a decrease of 2.8 percentages points, the company termed it a sharp drop, from February. CoreLogic also said that the average cash share of sales over the first three months of 2016 was 34.7 percent, the lowest for a first quarter since 2008.
Cash sales peaked in January 2011 at 46.6 percent of total home sales nationally, close to double the average share prior to the housing crash. If those sales continue to decline at the same rate as the February-March pace, CoreLogic estimates they will return to the “normal” 25 percent level by mid-2018.
As usual, sales of lender owned property (REO) had the highest share of cash sales, 57.2 percent. However, REO transactions accounted for only 6.8 percent of March sales so the impact on the overall cash share was small. When cash sales were at their peak REO sales made up close to a quarter of the market.
Resales accounted for 80 percent of sales and had the second highest cash share at 32.9 percent. Short sales, again only a small fraction of the overall market, had a cash share of 30.6 percent while 14.4 percent of new home sales did not involve a mortgage.
Alabama had the largest cash sales share of any state at 49.8 percent, followed by New York (47.5 percent), Florida (45.9 percent), Michigan (41.8 percent) and Indiana (41 percent). Of the nation’s largest 100 Core Based Statistical Areas (CBSAs) measured by population, Philadelphia led with a 55.7 percent cash share. Four Florida cities followed; West Palm Beach-Boca Raton, Cape Coral-Fort Myers, Sarasota-Bradenton, and Miami, all with shares exceeding 50 percent.