By Mike Colpitts
Pent up buyer demand and much lower housing prices are driving a frenzy of sorts in some home markets as cash buyers turn out in droves to buy up properties on the cheap. Cash is once again king in the real estate market.
When markets take a downturn cash buyers snap up deals betting that prices will rebound in time, and that prices are at or near rock bottom. That isn’t of course always the case but at least for those loaded few cash buyers it may feel that way for a while.
Cash buyers purchased more than half of all condos and homes in the greater Miami area last year, picking up condos at cheap prices since the markets bubble peak. Across the U.S. the National Association of Realtors says 28% of all home sales in 2010 were cash.
Phoenix and Las Vegas may have been the leaders with all greenback buyers. More than half of purchasers paid cash in the gambling Mecca, while 42% did in Phoenix, which had the highest median home price in the nation at the peak of the market.
The more depressed the housing market has been it seems the more cash transactions, which comes down to affordability. Cash real estate buyers get the best deal of all since they can waive contingencies especially financing, and their purchases can close the fastest.