All cash deals remain prevalent in Bay Area home buying, particularly in the high end. 46 percent of transactions above $3 million were all-cash while 41 percent of real estate transactions between $2 million and $3 million were all cash.
All told, all-cash purchases account for 25 percent of hime sales in the Bay Area.
Most all-cash buyers are purchasing for investment or tax advantages while those buying with mortgages are more likely to live in the home.
According to data from CoreLogic the percentage of home sales that are all-cash transactions is down to 31 percent from a high of over 46 percent in January 2011. Analysts say that the decline in distressed inventory (REO or “real estate owned”) is the primary reason for the lower percentage as investors are likely to purchase the REO properties with cash.
In addition, the percentage of investors purchasing homes – all-cash or not – is also declining.
CoreLogic estimates that at the current rate, all-cash transactions will return to their pre-crisis average of 25 percent by mid-2017.