Cash Buyers Make Their Move

We’ve been talking about Cash buyers and the increased number of all cash transactions. This week, the Economic Focus wrote the following for the week of April 4, 2011:

When investors move into the housing market it has been a sure sign that the market is nearing an upswing. And right now the cash investor is king.
Campbell Surveys reports that investors accounted for 23.5 percent of February’s sales, a jump of 19.9 percent over two months earlier.
The NAR reports that all-cash transactions made up a record 33 percent of sales in February. That is 5 percent increase year-over-year.
While constricted credit and unemployment have kept households on the sidelines, investors are back in the housing market.
This market is especially attractive to investors because:

1) The for sale inventory is high and loaded with distressed properties at bargain prices;

2) The rentals are becoming scarce and rental income is delivering a solid return on the dollar and;

3) Believing the market is about to upswing it now offers the benefits of equity appreciation over time.

February’s HousingPulse Distressed Property Index (DPI) declined for the first time since last fall.
ARIZONA – The Arizona market is seeing investors and businesses sweeping up distressed properties and REOs, renovating them and putting them back on the market, for a modest return. Sure, the profit is less than past years’ flipping, but a good return none the less.
NEW JERSEY – Buyers in New Jersey are finding market more competitive with multiple offers on many properties. When was the last time you heard that?
LAS VEGAS – DataQuick reports February home sales in Las Vegas rose to a five-year high propelled by cash and investor purchases. The all cash transactions rose to 2,198 – 56.7% of sales.
Distressed sales of foreclosed homes and short sales represented 71% of all transactions in February.
February’s HousingPulse Distressed Property Index (DPI) declined for the first time since last fall.


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