EagleTribune.com, North Andover, MA

Merrimack Valley

May 10, 2014

Now more than ever, cash is king in real estate

(Continued)

Florida topped all states for all-cash home sales, with 55 percent of sales done in cash the first three months of this year. That’s on a par with 54 percent for all of last year and 56 percent in 2012.

Many of those sales are in South Florida, where buyers from Russia, Latin America and the Caribbean often buy in cash.

“It is cash, cash, cash, cash,” said Joan McCaughan, a top Miami real estate agent with the McCaughan & Mandiola Real Estate Group, adding that these buyers are “from all over the world” and stay part of the year in Miami.

Investors are a smaller share of today’s South Florida buyers, she said, noting they got into the market immediately after the housing crisis several years back during the time of depressed prices.

The Orlando area and both coasts of the Sunshine State also attract cash-paying boomers, and they tend to buy homes above the midpoint price in the state, said Yun. That suggests investors are buying on the lower end of the price scale, while retiring boomers are buying on the upper end.

Similarly, retiring boomers have driven Arizona’s high percentage of cash sales, which appears to be ebbing slightly after accounting for 41 percent of home sales in the state during 2012.

“We have a huge population of ‘adult community’ folks. You rarely find financed purchases in those adult communities,” said Dena Greenawalt, a Realtor in Phoenix for Re/Max Infinity. “We still have a fairly good contingent coming from Canada who have cash and buy second homes here.”

Investors, including many from Wall Street, descended on Phoenix during the housing crisis but, as in Florida, they appear to be a smaller part of the equation now.

“It’s not as much in the past six to nine months, but you still have a lot of folks who are buying rental property to buy and hold,” said Greenawalt.

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