“Cash is king”, they say. And for the last few months, reports have been floating around that as many as 50% of buyers in some real estate markets around the country are using cash to purchase their homes.
The New River Valley of VA isn’t the rest of the country, but I wondered how many buyers in 2013 used cash to buy their real estate. Of the 1476 homes sold in the NRV January 1 through November 30, 21.4% (317) of those transactions were listed as all-cash sales. Not exactly 50%, but statistically significant, I’d say. And that number of 21.4% is actually down from 2012, when 23.2% of all sales were all-cash sales.
Interesting? Perhaps. It’s hard to say how many of those 317 sales were foreclosures, which are very often cash sales, and what is spurring the increase nationwide. It does highlight again the fact that, while the rest of the country as a whole might be seeing an increase in cash sales, the New River Valley has actually seen a decrease. Real estate is local … what happens here might not be happening elsewhere, and vice versa.
As a quick aside, I also looked at how many properties were selling with other popular loan types. Interesting to see how, when the market in 2012 hadn’t quite started to pick up steam yet, a greater percentage of buyers chose little (FHA) to no-money down (USDA) options versus putting down a down payment.
|Type of Loan||2013||2012|
|FHA (96.5% financing)||101||145|
|USDA (100% financing)||98||113|
|VA (100% financing to eligible veterans)||79||53|
The long and short of it? Perhaps another reminder that what we hear about real estate on the news may or may not be happening in a particular area … other than that, sometimes it’s just interesting to see what the numbers actually report.