A Surprising Number of Homes Are Bought For Cash

All-cash deals in the real estate market are at 10-year highs.
February 28, 2023
2 mins read
A Surprising Number of Homes Are Bought For Cash

In the real estate world, few things can stir up controversy quite like all-cash purchases — while being able to pay for a house upfront fast-tracks the sales process, the practice is widely derided in markets with low affordability and an onslaught of investors.

According to data from real estate analytics firm Attom, all-cash sales made up 36.1% of all home sales in 2022. This is a ten-year high but still significantly below what is seen in many of the country’s hottest real estate markets. 

This Is Where You’ll Find The Most All-Cash Buyers

In Augusta, Georgia, 72.1% of all real estate transactions were paid for entirely in cash. The Peach State has, in general, been seeing a high proportion of all-cash buyers — Columbus and Athens top the country’s list of high all-cash sale areas with a respective 69% and 60.6%.

Outside Georgia, cities with some of the highest numbers of all-cash sales include Michigan’s Flint (59.5%) and Naples, Florida (58.2%). 

Read More: Cash Is King Once Again in This Market Environment

In general, cities with high numbers of all-cash sales are up-and-coming areas outside major urban centers. Atlanta is an exception with 53.5% all-cash sales but, in general, real estate prices that are significantly lower than the national average make it easier for buyers to have the cash to pay upfront.

The types of cities on the list also reflect home-flipping trends and movement between expensive and less expensive markets amid the rise of remote work. A large number of the buyers are coming in from out of state with funds earned from selling a home in a more expensive area.

We’re Going To Keep Seeing High Rates Of All-Cash Buyers

“It’s mostly people retiring, or people who have sold something in other parts of the country and made a lot of money off of it and are able to pick up something here for cash,” Heather Kruayai, a Redfin  (RDFN) – Get Free Report real estate agent in Jacksonville, Florida, toldBloomberg.

But the Attom data also indicates a slight shift away from flipping done by investors and developers. Many of the cities on the list do not have traditionally “hot” real estate markets and the buyers intend to live there themselves rather than make a profit.

“We don’t see hedge funds purchasing anymore,” Las Vegas real estate agent Shay Stein told Bloomberg. “I think a lot of investors, they’re wondering what the market is going to do.”

As the real estate market ebbs, high rates of all-cash purchases are not necessarily the same as cities with high interest for investors. While cash purchases are highest in the Southeast, the Midwest is currently most attractive for investors. According to Realtor.com’s annual round-up of cities with the fastest-growing home values, home prices in Wichita, Kansas rose by 21.5% per square foot between December 2021 and 2022.

Omaha, Nebraska and Jackson, Missouri also topped the list while prices in Denver and Boise fell by a respective 5.7% and 5.6%.

“These are destinations for people who were fleeing high-cost urban cities,” George Ratiu, a senior economist for Realtor.com, said in a statement on the findings. “It’s the natural reaction to the sharp run-up in prices over the past couple of years now meeting the new, higher mortgage rates this year.”

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