Cash home sales in May decreased month-over-month and year-over-year, making the first five months of 2016 the slowest start to a year since 2008, according to a report from CoreLogic.
In May, cash sales made up 30% of total home sales, which is down 2.5 percentage points from May 2015, and 1.7 percentage points from April. For the first five months of 2016, cash sales averaged 33%.
For comparison, cash sales peaked in January 2011 at 46.6% of total home sales nationally. Before the housing crisis, cash sales averaged 25%. If the rate of decrease continues at its current rate, cash sales would hit pre-crisis levels by mid-2018.
Real estate-owned sales had the largest share of cash sales in May, coming in at 56.6%. Resales were next with 29.8%, followed by short sales at 27.9% and newly constructed homes at 14.6%.
While the percentage of REO cash sales was the highest, it made up only 5.1% of total market sales in May. Instead, resales had the highest impact at 83% of market sales in May.
In January 2011 when cash sales hit their peak, REO sales made up 23.9% of the market.
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Of all the states, Alabama had the largest share cash sales at 45.2%, followed by New York at 45.1%, Florida at 42.4%, New Jersey at 36.4% and Indiana at 36%.
Of the largest 100 Core Based Statistical Areas, measured by population, the area with the largest share of cash sales was Detroit-Dearborn-Livonia, Michigan, at 52.3%. This was followed by West Palm Beach-Boca Raton-Delray Beach, Florida, at 52.3%, Philadelphia at 52%, North Port-Sarasota-Bradenton, Florida, at 50.3% and Cape Coral-Fort Myers, Florida, at 49.3%.
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