In January 2017, 23 percent of sales were cash sales (21 percent in December 2016; 26 percent in January 2016), according to the January 2017 REALTORS® Confidence Index Survey Report, a monthly survey of REALTORS® about their sales activity and local market conditions.[1] Buyers of homes for investment purposes, distressed sales, second homes, and foreign clients are more likely to pay cash than first-time home buyers. As the shares of investment and distressed sales have declined, so has the share of cash sales.

cash sales by buyer
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Distressed sales accounted for seven percent of sales in January 2017 (seven percent in December 2016; nine percent in January 2016). Foreclosed properties were five percent of residential sales, while short sales were only two percent of residential sales.[2] With rising home values, improved economic conditions, and fewer foreclosures, the share of sales of distressed properties has generally continued to decline. Distressed sales accounted for about a third to half of sales until 2012 when they began to fall below this level.

Investment sales made up 15 percent of sales in January 2017 (15 percent in December 2016; 17 percent in January 2016). Purchases for investment purposes have generally been on the decline since 2011–2012 when investment sales accounted for 20 percent of sales. Purchasing for investment has become less attractive with fewer distressed sales on the market and with home prices rising.

investment
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[1]The author thanks Danielle Hale, Managing Director, Housing Research; Meredith Dunn, Research Communications Manager; and Amanda Riggs, Research Survey Analyst for their comments. Any errors are attributable to the author.

[2] The survey asks respondents who had a sale in the month to report on the characteristics of the most recent sale closed.

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Source: Economy

Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.


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This Article Appears Courtesy of Steven Diadoo

Steven Diadoo, Licensed Realtor in MN with BRIDGE REALTY and best-selling author of 'Road to Success' with Jack Canfield (Chicken Soup for the Soul), Board Member at Bowling for Brains Non-Profit 501(c)3 (Event to benefit the American Brain Tumor Association), licensed Realtor with Bridge Realty, Seen on DIY TV, Create Channel and PBS. For help buying and/or selling a house, please call (952) 270-6141 or Click here.

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