I read this headline in an article by Jennifer Huffman, All-cash buyers cut swath through Napa housing market, on the June 16th front page of Napa Valley’s largest circulation newspaper, the Napa Register. The article went on to state cash buyers are now about 25% of the buyers here in the Napa Valley real estate market down from a high of 40%. After reading this I decided to check out the numbers printed there. Here are a few excerpts from her article.
The number of Napa homes purchased with all cash reached almost 40 percent in 2012, the result of high investor interest, a difficult mortgage environment and perceived higher returns on investment, a real estate information service reported.
In 2011, 354 Napa County properties were bought with all cash. In 2012 that number reached 490, San Diego-based DataQuick reported earlier this year. That’s a 38.4 percent increase.
Halfway through 2013, those involved with the local real estate industry report that all-cash offers are still common but aren’t always required to make a successful offer.
“It’s clear that a lot of today’s housing market recovery is being fueled by people putting their own money into homes. Some cash buying is part of a normal housing market, but we’re at twice that normal rate,” said John Walsh, DataQuick president.
“There are always some rich people, also buyers from abroad, but in a normal market the biggest single category would be retirees and empty-nesters who are downsizing. Today, a lot of buyers are chasing what they view as the deal of a lifetime,” Walsh said.
Cash purchases accounted for a record 32.4 percent of California’s overall home sales last year, up from 30.4 percent in 2011 and more than double the annual average of 15.6 percent since 1991, when DataQuick’s cash statistics begin.
Upon checking my Multiple Listing Service’s numbers, BAREIS which includes about 90 to 95% of all sales in Napa County, I found in the last 3 months for all residential sales, cash buyers accounted for 29.3%. There were a total of 84 cash sales of the 287 real estate transactions according to BAREIS. Being the statistic person that I am, I took it one step further and broke out the cash buyers for distressed sales as well. For those who like these type of numbers, here they are:
- Total Sales 287
- In Foreclosure 2 which is .7%
- In Default 7 which is 2.4%
- Short Sales 40 which is 13.9%
- Bank Owned, REO, 25 which is 8.7%
- Total cash distressed sales 74 which is 25.8%
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