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Real Estate

Cash buyers are scooping up homes like mad

West Palm Beach, Naples, Florida tops nation with plus-50% all-cash purchases

Cash buyers are pouring into the housing market this year, and they’re picking off more than half of available inventory in certain areas in Florida and New York.

As of July 14, nearly one-third of U.S. home purchases this year were paid with just cash — 30%, specifically — according to a recent Redfin study. That represents the largest share since 2014, when 30.6% of homes were purchased with all cash. In 2020, roughly 25% of homebuyers paid cash for their properties.

The S&P 500 Index has gained 36% in the past 12 months alone, and cash purchases are on the rise as Americans reap the benefits of a strong stock market, said Shauna Pendleton, a Redfin real estate agent in Idaho.

“I’ve never seen more cash in Boise’s housing market than I’ve seen in the past year,” Pendleton said. “I just sold a $700,000 home to a cash buyer last week. The entire $700,000 came from his E*Trade account.”

Pendleton noted affluent homeowners in Seattle, Portland and parts of California are selling their homes for $1 million to $2 million — then moving coming to Boise, where they’re buying houses that are twice the size and half the price.


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“Remote work has allowed homeowners in expensive cities, including San Francisco and New York, to sell their homes and move to less expensive areas, where they can often afford to buy properties in cash,” she said.

Investors, who often pay in cash, are also wading back into the housing market. U.S. home purchases by investors rose 2.7% year over year in the first quarter, marking the first period of growth since the coronavirus pandemic began, Redfin reported.

“It can be difficult to compete with an all-cash offer, but prospective buyers should keep in mind that these bids don’t always turn into purchases,” Pendleton said. “Cash buyers are frequently the first to back out because they know they can compete in the market, so they easily get buyer’s remorse if they’re worried they might be overpaying for a house. That’s often good news for financed buyers because it means fewer bids to compete with.”

Homebuyers who offer all-cash improve their chances of winning a bidding war by 290%, according to a March Redfin study. And waiving the financing contingency is the second-most effective bidding-war strategy, Redfin officials said – improving homebuyers’ odds of winning by 66%.

“Offering all cash is usually an effective bidding-war strategy, but the market is so hot that even the number-one strategy has evolved this year,” said Nicole Dege, a Redfin agent based in Orlando. “All-cash buyers used to be able to go in a little below list price, but now I’m seeing a lot of cash offers that are at list price or higher. Anything below list price, regardless of the terms, just can’t compete.”

Regionally, the West Palm Beach, Florida metro area has already reported 52.6% of home purchases this year paid for with all cash — the largest share of the 86 metropolitan areas in Redfin’s analysis. West Palm Beach was followed by Naples, Florida (52.5%), Nassau County, New York (50.2%), North Port, Florida (49.4%), Port St. Lucie, Florida (46.2%), Greenville, South Carolina (45.4%), Palm Bay, Florida (44.1%), Cape Coral, Florida (44.1%), Des Moines, Iowa (41%) and Jacksonville, Florida (40.1%).

Dina Blau, a Redfin real estate agent located in West Palm Beach, said Florida annually ranks at the top of the list for second-home purchases — many of which are bought with cash.

“Folks also flocked to Florida to buy primary homes during the COVID-19 pandemic,” Blau said. “They sold their houses in New York, New Jersey, Chicago or California and used the proceeds to pay cash for properties in Florida.”

On the opposite end of the all-cash spectrum came California, with a percentage of homes being sold for cash only topping out around 20%. In both San Jose and Oakland, 12.5% of reported home purchases this year used all cash — the lowest share of the metros Redfin analyzed. Los Angeles (16%), San Diego (16.2%), Sacramento (17.7%), Oxnard (18%) and Bakersfield (19.3%) were other sub-20% California markets.

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