I am certain you hear continually stories about how difficult it is to obtain a new home loan. Maybe you are one of those who have recently gone through the process and are a happy new home owner. If so, congratulations. For all the rest of us, including myself, who have great credit and 20% + cash down, it is not possible to obtain a residential loan today given all the recent tightening of lending requirements to qualify. In my situation, being in real estate sales, my income has shrunk enough but my expenses only continued to rise.
In January 2011 32% of all residential sales, both homes and condos, where all cash. Statewide hit a new record of 30.9% of all sales. Here are a some excerpts from yesterdays San Francisco Chronicle’s article by Carolyn Said, State cash home sales hit record 30.9% in January:
A record 30.9 percent of all houses and condos sold in the state in January were purchased without a mortgage, according to real estate service MDA DataQuick. In 2010, home purchases without a mortgage accounted for 27.8 percent of all residences sold, also a record.
By comparison, over the past 10 years, the percentage of homes sold for cash averaged 13.9 percent, DataQuick said.
In the nine-county Bay Area, 28.7 percent of homes sold in January did not show a record of a mortgage, compared with 26 percent a year earlier. That was a record for the region, which has averaged about 12.4 percent of monthly sales being for cash over the past decade, according to DataQuick.
Cash sales were a particularly potent force in Solano (35.9 percent of sales) and Contra Costa (32 percent of sales) counties. Those two counties have been hardest hit by foreclosures and seen property values swoon.
Most cash buyers went for lower-cost properties. The median price paid for all-cash purchases in California in January was $160,000 versus the state median for all homes of $239,000.