IRVINE, Calif. – Nov. 6, 2014 – Florida had more cash sales in the third quarter of 2014 than any other U.S. state, and a closer look at metro areas finds five Florida cities in the top five – and eight in the top 10. The data includes both single-family homes and condos.
According to RealtyTrac'sQ3 2014 U.S. Institutional Investor & Cash Sales Report, the state also has four of the top 10 cities for cash sales by institutional investors – buyers who purchase 10 or more homes per year.
In the third quarter (July-September), over half of all Florida sales (53.5 percent) were all-cash. Only Maine came close with 50.0 percent, followed by Alabama with 42.2 percent. Still, the percentage of all-cash Florida sales has declined over time. In the second quarter it was 57.6 percent; a year earlier, it was 56.2 percent.
Drilling down by metro area, Florida is also home to the U.S. leader: In Miami-Fort Lauderdale-Pompano Beach, two out of three sales are all-cash (59.1 percent), though in both the quarter and a year earlier, the percentage was above 63 percent. The following Florida cities round out RealtyTrac's top five for all-cash sales:
- Cape Coral-Fort Myers (55.8%)
- Sarasota-Bradenton-Venice (54.5%)
- Tampa-St. Petersburg-Clearwater (51.1%)
- Palm Bay-Melbourne-Titusville (50.9%)
Two other Florida metro areas are added if looking at the top 10 all-cash list: Orlando-Kissimmee (47.6 percent) at No. 7 and Jacksonville (47.1 percent) and No. 9.
RealtyTrac also broke down the all-cash sales for a look at institutional investors. While national cities landed the top four spots, Florida metro areas ranked for the next four spots – five through eight. Cities and percent of institutional investor activity include:
- No. 5 Orlando-Kissimmee (11.0% in 3Q, up from 9.4% year-to-year)
- No. 6 Jacksonville (10.9%, down from 12.6% year-to-year)
- No. 7 Miami-Fort Lauderdale-Pompano Beach (8.6%, up from 6.3% year-to-year)
- No. 8 Tampa-St. Petersburg-Clearwater (8.6%, up from 7.5% year-to-year)
National all-cash sales
Cash sales helped "drive up U.S. median home prices 38 percent over the last two and half years," says Daren Blomquist, vice president at RealtyTrac. "As institutional investors and other cash buyers slow down their purchasing … more traditional buyers – including first-time homebuyers and move-up buyers – will need to increasingly fill in the missing puzzle pieces to maintain the momentum of the housing recovery.
"Institutional investors are still actively purchasing single family rentals, but continue to gravitate toward markets where lower-end inventory is still available," Blomquist adds.
The share of institutional investor sales increased from a year ago in eight states, including Florida. The share of cash sales increased from a year ago in 22 states. Cash sales represented 54.6 percent of distressed sales in the foreclosure process or bank-owned.
© 2014 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.
NOTE FROM JOHN ELWELL: Since I work in an area with a high retiree population, I often go months without having a sale that involves a mortgage or loan. Most buyers in the 55+ "snowbird" set pay cash for their winter homes and often see them as a better investment than buying CDs, or other investment products that currently tend to have low rates of return. Cash deals are usually very smooth and tend to eliminate the hassles of surveys, loan origination fees, appraisals, lender title insurance, and other loan costs.