According to a March 21st report by the National Association of Realtors, a record 33% of existing-home sales were made to cash buyers in February of 2011. In October of 2008 when the company started tracking such purchases, the total was only 15%. These numbers do not include property bought in
foreclosure auctions, which are almost all cash-only transactions.
All-cash purchases are typically pursued by investors who have the money to purchase the homes for less with cash as opposed to a loan, to then fix them up and rent or resell the property. According to Walter Molony, a spokesperson for the Realtors Association, said that the "lion's share" of all-cash purchases are made by investors, but the group does not keep individual statistics on the number of investors versus buyers who will occupy the property themselves.
As an example, Bloomberg recently reported online that Delavaco Properties LP, a private-equity fund, plans to spend as much as $30 million in 2011 and $40 million in 2012 to purchase bank-owned houses and condos in the South Florida area, paying cash. Robert Theocles, an independent consultant for Delavaco, said in a telephone interview, "If there weren't vultures out there, you'd have a city of dead carcasses."
An analyst for New York-based investment bank Morgan Stanley has indicated that approximately half of all cash purchases were completed in the Miami, Las Vegas and Phoenix areas, specific areas where prices have plummeted and bank-owned properties have skyrocketed due to high foreclosure rates.
If you are one of many Americans who is faced with foreclosure or bankruptcy and are currently weighing your options, now is the time to talk to an attorney who can provide you with honest insight into the matter. This is an important financial decision that may impact your life for years into the future. The Long Island bankruptcy law firm of Jacoby & Jacoby can offer you the help and guidance you need.
Contact a bankruptcy lawyer at Jacoby & Jacoby today.