Today’s Wall Street Journal had an interesting piece on cash buyers and how they’re breathing life into some of the nation’s most battered housing markets. See Cash Buyers Lift Housing.
According to the WSJ piece, cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year, and the percentage of buyers in Phoenix paying cash hit 42% in December 2010.
Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors.
The story also listed the cities with the highest percentage of homes purchased through all-cash deals in December 2010. The top-ten cities were:
- Miami: 54.2%
- Las Vegas: 45.9%
- Tampa, Fla.: 44.6%
- Phoenix: 35.6%
- Stockton, Calif.: 29.1%
- Chicago: 23.4%
- San Diego: 23.1%
- San Francisco: 20.4%
- Los Angeles: 18.7%
- Seattle: 16.0%
- Washington DC: 12.2%
So I wondered how does Reno-Sparks’ housing market rank when it comes to cash purchases? With the help of our MLS I pulled all residential stick built (non-condo) sales for 2010. Of the 5,348 sales in 2010, 1,126 were purchased for cash. That’s 21.1 percent.
Next I performed the same exercise for the month of December only. 126 cash sales of the 476 sales for the month yields 26.5 percent. One in four houses purchased for cash clearly places Reno-Sparks in the top-ten list above.
In case you’re wondering FHA is currently the preferred method of finance home purchase (see table below).