MIAMI – April 12, 2011 – With affordability at an all-time high, the number of investors and international buyers taking advantage of bargains has reached a record number in all-cash purchases – and some experts predict that number will only grow higher.
A record 33 percent of existing-home sales were made to cash buyers in February, the National Association of Realtors (NAR) recently reported. The proportion of cash deals could hit 40 percent by the end of this year. Lenders have only been willing to lend to the cream of the crop in terms of credit scores. As a result, you’re seeing a depressed level of traditional buyers. But it’s not just investors moving in, many of these cash deals are also coming from a growing number of international buyers. About 55 percent of international buyers paid cash for their U.S. homes, according to an April 2010 report by NAR.
The Cash Buyer Advantage?
Cities where about half of all purchases were done with cash include Detroit, Miami, Las Vegas, and Phoenix, in which prices have dropped considerably and foreclosure rates remain high. Short sales and foreclosures accounted for 59 percent of last year’s cash sales. You buy the house at a discount with cash, then you flip it almost immediately to the first-time homebuyer who’s using a mortgage, simply because they were not able to buy at the foreclosure sale.
Lenders increasingly reject mortgage applications for foreclosed properties because appraisals are often too far below the agreed-upon price or the transaction takes too long to close, With tightened lending standards, cash purchases can provide buyers with more leverage and allow buyers to close properties more quickly. A Florida real estate investor says, “If a house is listed at $40,000 and a buyer offers $35,000 cash, nine times out of 10, the bank will take the cash.”
Two Florida Cities set for Dramatic Turnaround.
WASHINGTON – April 12, 2011 – Kiplinger.com names two Florida cities – Jacksonville and Orlando – to its list of 11 comeback cities in 2011. According to the website, 2011 will see a “dramatic turnaround – new investment by businesses, growth in the number of jobs and a re-blooming of hope” in the noted cities. The website did not list the cities in any particular order Orlando Kiplinger predicts that Orlando employment will increase by 3 percent this year. It points to an improvement in tourism for the vacation destination, but also points to the growth of a “life science cluster of medical care and research”. Jacksonville Kiplinger expects job growth of 2.8 percent this year. It points to increased demand from financial service firms, hotels, health care, restaurants and warehousing. Other cities in the top 11 for a turnaround include: Charlotte, North Carolina; Chattanooga, Tennessee; Flint, Michigan; Portland, Oregon; San Jose, California; Nashville, Tennessee; Las Vegas, Nevada; and Phoenix, Arizona.
A record 33 percent of existing-home sales were made to cash buyers in February, the National Association of Realtors (NAR) recently reported. The proportion of cash deals could hit 40 percent by the end of this year. Lenders have only been willing to lend to the cream of the crop in terms of credit scores. As a result, you’re seeing a depressed level of traditional buyers. But it’s not just investors moving in, many of these cash deals are also coming from a growing number of international buyers. About 55 percent of international buyers paid cash for their U.S. homes, according to an April 2010 report by NAR.
The Cash Buyer Advantage?
Cities where about half of all purchases were done with cash include Detroit, Miami, Las Vegas, and Phoenix, in which prices have dropped considerably and foreclosure rates remain high. Short sales and foreclosures accounted for 59 percent of last year’s cash sales. You buy the house at a discount with cash, then you flip it almost immediately to the first-time homebuyer who’s using a mortgage, simply because they were not able to buy at the foreclosure sale.
Lenders increasingly reject mortgage applications for foreclosed properties because appraisals are often too far below the agreed-upon price or the transaction takes too long to close, With tightened lending standards, cash purchases can provide buyers with more leverage and allow buyers to close properties more quickly. A Florida real estate investor says, “If a house is listed at $40,000 and a buyer offers $35,000 cash, nine times out of 10, the bank will take the cash.”
Two Florida Cities set for Dramatic Turnaround.
WASHINGTON – April 12, 2011 – Kiplinger.com names two Florida cities – Jacksonville and Orlando – to its list of 11 comeback cities in 2011. According to the website, 2011 will see a “dramatic turnaround – new investment by businesses, growth in the number of jobs and a re-blooming of hope” in the noted cities. The website did not list the cities in any particular order Orlando Kiplinger predicts that Orlando employment will increase by 3 percent this year. It points to an improvement in tourism for the vacation destination, but also points to the growth of a “life science cluster of medical care and research”. Jacksonville Kiplinger expects job growth of 2.8 percent this year. It points to increased demand from financial service firms, hotels, health care, restaurants and warehousing. Other cities in the top 11 for a turnaround include: Charlotte, North Carolina; Chattanooga, Tennessee; Flint, Michigan; Portland, Oregon; San Jose, California; Nashville, Tennessee; Las Vegas, Nevada; and Phoenix, Arizona.
