Cash sales decline; many were for lower-priced homes
Cash sales have accounted for about one of every three local existing home sales since the first of the year. They have also been credited with driving up local home prices. Despite persistent claims of out-of-state buyers overbidding locals, the data shows something different.
May’s decrease was small – 29% of sales compared to 35.1% in April. At the same time, the average price for those cash sales ($220,000) was the highest it has been so far this year and only $30,000 below the typical regional sales price. That’s a big change.
Cash buyers also paid above the list price for the second month this year. The average sale was for less than the list price in January, February, and March.
Prices for the first three months of the year averaged $174,483, and they sold for an average of $4,604 under the list price. That doesn’t mean some buyers in the higher price ranges didn’t pay of list price, but it does show that the number paying under list is skewing the total lower.
Investors stepping up their purchases to get in on the rent increase trend. They’re competing with bargain buyers – and some first-time buyers – who have been shut out of the current resales sweet spot of $250,000 to $300,000.
Flippers also are active players in cash sales. During the first quarter, there were 184 purchases for flips and almost 70% were cash sales. The homes they buy, renovate then sell typically account for about 10% of all existing home sales.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us