Do you have enough money to buy a house right now? I mean pay it off completely – no mortgage needed… 100% cash, right this very minute. If you’re like most people, you can’t. But do you know who can? A whole bunch of buyers in California.
Mortgage News Daily (MND) recently reported that more than one-third (which is apparently a new all-time high) of the homes sold in ‘The Golden State’ last year were cash only purchases. That means pennies, nickels, dimes, bills – whatever the chosen combination – more than 145,000 homes and condos were paid for using cold hard cash in 2012, according to DataQuick.
So, who is scooping up these homes and just how much are they paying for them?
DataQuick says home buyers in California, who used cash to pay for their homes, shelled out an average of $205,000 last year. Interestingly enough, more than 50% of those buyers were investors and vacation home buyers.
VIDEO: KGO 7 in Northern California talks with a San Francisco Bay Area buyer who says he knows first-hand that cash is the key to purchasing a home right now
DataQuick attributes the sales to high investor interest and a difficult mortgage environment.
In an interview with MND, DataQuick President, John Walsh, had this to say:
“I’m sure a lot of today’s cash buyers would love to take advantage of the current low mortgage interest rates, but since the ‘loans-gone-wild’ days of 2004-2006, the lending pendulum has swung to the opposite end of the spectrum. Even a lot of well-qualified buyers can’t get loans. While the market overall is improving, sales levels are still below average, and prices much closer to the bottom than to the peak.”
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