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CoreLogic: Paying cash for houses lowest in nearly 10 years

Cash sales now on track to hit pre-crisis level in mid-2019

Last year, the share of homes bought with cash fell to the lowest level since 2007, a new report from CoreLogic showed.

According to CoreLogic’s report, cash sales made up 32.1% of all home sales in 2016, falling 2.2% from 2015’s total. That’s the lowest annual cash sales share since 2007, when cash sales accounted for 27% of all sales.

For reference, the cash sales share peaked in January 2011, when cash transactions were 46.6% of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%, CoreLogic’s report showed.

CoreLogic’s report showed that in the month of December, cash sales represented 33.1% of total home sales, down 1.3 percentage points from the same time period in 2015.

According to the report, if the cash sales share continues to fall at the same rate it did in December 2016, the share should hit 25% by mid-2019.

That trend represents a significant change from last month’s report, which showed that cash sales were tracking to hit pre-crisis levels later this year.

CoreLogic cash sales by type December 2016

(Click to enlarge. Image courtesy of CoreLogic)

Additionally, CoreLogic’s report also showed that cash sales weren’t the only data point to fall to a nine-year low in 2016.

According to the report, the national distressed sales share of total home sales was 7.8% in December 2016, which is the lowest distressed sales share for any month since October 2007.

For the full-year 2016, the distressed sales share was 8.9%, down 2.1 percentage points from the full-year 2015, marking the lowest annual distressed sales share since 2007 when it was 6%.

For reference, at its peak in January 2009, distressed sales made up 32.4% of all sales.

The pre-crisis share of distressed sales was normally around 2%. If the current year-over-year decrease in the distressed sales share continues, it will reach that “normal” 2% mark by mid-2018, CoreLogic’s report showed.

Diving deeper in to December’s data, CoreLogic’s report showed that real-estate owned sales had the largest cash sales share in December at 61.1%.

Short sales were the next highest, with a share of 34.2%, followed by resales at 33% and newly constructed homes at 16.7%.

While the percentage of REO sales within the all-cash category remained high, REO transactions have declined since peaking in January 2011, CoreLogic’s report noted.

Broken down by state, New York had the largest cash sales share of any state at 47.9%, followed by New Jersey (47.6%), Alabama (46.1%), Michigan (44.3%) and Florida (42.1%). For a more detailed state-by-state breakdown, click the image below.

CoreLogic cash sales by state December 2016

(Click to enlarge. Image courtesy of CoreLogic)

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