Welcome!

News Feed Item

All-Cash Share of U.S. Home Sales Pulls Back From 3-Year High, Institutional Investor Share Drops to 3-Year Low

Cash Purchases 38 Percent of Q2 Home Sales, Down From 42 Percent in Q1; Institutional Investor Purchases 4.7 Percent of Q2 Sales, Lowest Since Q1 2012; Report Includes Analyses of Subsequent Financing on Cash Sales, Bulk Investor Buys

IRVINE, CA -- (Marketwired) -- 08/19/14 -- RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released its Q2 2014 U.S. Institutional Investor & Cash Sales Report, which shows all-cash sales accounted for 37.9 percent of all sales of single family homes and condos nationwide in the second quarter, down from a three-year high of 42.0 percent in the previous quarter but still up from 35.7 percent a year ago.

The report also shows that sales to institutional investors -- entities that purchase at least 10 properties in a calendar year -- accounted for 4.7 percent of all sales of single family homes and condos in the second quarter, down from 5.3 percent in the previous quarter and down from 5.8 percent a year ago to the lowest level since the first quarter of 2012.

"The flurry of purchases by institutional investors and other cash buyers that kicked off two years ago when U.S. home prices hit bottom is finally showing signs of subsiding," said Daren Blomquist, RealtyTrac vice president, noting that the U.S. median home prices bottomed out in March 2012. "Over the past 10 quarters cash sales have accounted for 39 percent of all home sales on average, and institutional investor purchases have accounted for 5.3 percent of all home sales on average. Prior to that, from 2001 to 2011, the average quarterly cash share was 30 percent, and the average quarterly institutional investor share was 2.6 percent."

"This is a classic good news/bad news scenario for the housing market," Blomquist continued. "The good news is that fewer cash buyers should help loosen up inventory of homes for sale and reduce competitive bidding, giving first time homebuyers and other non-cash buyers more opportunities. The bad news is that some of those first time homebuyers and other non-cash buyers may already be priced out of the market thanks to the rapid run-up in home prices over the past two years in many areas."

Cash sales account for larger share of very high-end, low-end and distressed sales
The report shows that U.S. cash sales hit a recent peak of 45.8 percent of all home sales in the first quarter of 2012, when home prices bottomed out, but were down to as low as 34.0 percent of all sales in the third quarter of 2013 before jumping to 36.6 percent in the fourth quarter on the heels of the rise in interest rates and jumping again to 42.0 percent of all sales in the first quarter of 2014, when new qualified mortgage rules from the Consumer Financial Protection Bureau took effect.

Cash sales in the second quarter were skewed higher on both ends of the home price spectrum. Cash sales accounted for 67 percent of purchases of homes selling for $100,000 or less, and cash sales accounted for 45 percent of purchases of homes selling for more than $2 million.

Cash sales represented a larger share of distressed sales, with 49 percent of bank-owned sales, 61 percent of sales of properties in the foreclosure process, and 96 percent of sales at the foreclosure auction. By comparison, non-distressed home sales were 36 percent all-cash.

Cash sales more than half of all sales in Miami, New York, Detroit, Atlanta, Las Vegas
Among metropolitan statistical areas with a population of at least 500,000, those with the top six highest percentages of cash sales were all in Florida: Miami-Fort Lauderdale-Pompano Beach (64.1 percent), Cape Coral-Fort Myers (62.1 percent), Sarasota-Bradenton-Venice (61.5 percent), Tampa-St. Petersburg-Clearwater (54.6 percent), Lakeland (53.0 percent), and Orlando-Kissimmee (52.2 percent). All six metros posted a lower all-cash share of sales than the previous quarter and a year ago.

Other major metro areas with an all-cash share among the top 20 highest nationwide were Las Vegas (50.7 percent), New York (48.2 percent), Detroit (47.7 percent), Kansas City (46.8 percent), Philadelphia (45.1 percent), and Cleveland (45.1 percent).

Analysis of percentage of cash sales with subsequent financing
RealtyTrac analyzed more than 7,500 all-cash transactions for single family homes in Orange County, Calif., between January 2013 and July 2014 to determine what percentage of the properties purchases were subsequently financed by the buyer.

The analysis found that 10 percent of those all-cash purchases had some sort of subsequent mortgage taken out by the owner who purchased with cash. The subsequent financing was recorded on average 136 days after the sale of the property was recorded.

Institutional investor share increases in Las Vegas, Jacksonville, Columbus, Miami
Among metropolitan statistical areas with a population of at least 500,000, those with the highest share of institutional investor purchases in the second quarter were Atlanta-Sandy Springs-Marietta (15.6 percent), Las Vegas-Paradise (14.4 percent), Jacksonville, Fla., (12. 5 percent), Memphis, Tenn. (12.0 percent), and Charlotte-Gastonia-Concord (11.3 percent).

Although Atlanta documented the highest share of institutional investor sales in the second quarter, its 15.6 percent share was down from a 20.6 percent share in the first quarter and a 16.5 percent share in the second quarter of 2013 -- following nine consecutive quarters with year-over-year increases in Atlanta's institutional investor share.

The institutional investor share of home purchases were also down from a year ago in Memphis and Charlotte, but increased from a year ago in Las Vegas and Jacksonville, bucking the national trend.

Other metro areas among the top 10 for institutional investor share with increases from a year ago were Knoxville, Tenn., (10.0 percent compared to 6.9 percent a year ago); Columbus, Ohio (9.2 percent compared to 6.9 percent a year ago); and Miami (8.2 percent compared to 6.7 percent a year ago).

Institutional investor breakdown: price, foreclosure status, financing and bulk sales
The report shows that the second quarter share of institutional investor purchases was the lowest since the first quarter of 2012, when they represented 4.6 percent of all U.S. home sales. The peak in institutional investor share of all sales was 6.0 percent in the first quarter of 2013.

In the second quarter institutional investors purchased homes at an average sale price of $147,017, while the average estimated full market value of the homes purchased was $164,553 at the time of the sale.

The majority of purchases made by institutional investors in the second quarter were all-cash (79 percent) and not in any stage of foreclosure or bank-owned (80 percent). Of the remaining 20 percent, 7 percent were bank-owned, 11 percent were scheduled for a foreclosure auction, and 2 percent were in default with no foreclosure auction date set.

Analysis of institutional investor bulk transactions on single family homes
Among the 29,444 single family homes purchased by institutional investors in the second quarter, 8,856 (29 percent) were bulk transactions involving multiple properties sold on the same date from the same seller and to the same buyer. The 29 percent bulk transactions was down from 31 percent in the previous quarter but still up from 19 percent a year ago.

An analysis of the buyers and sellers involved with the bulk transactions indicated that most of the bulk transactions involve an institutional investor with multiple corporations purchasing properties that are consolidating all of those properties under a single ownership name. A detailed breakdown of buyers and sellers involved in these bulk transactions is available upon request.

Report methodology
The RealtyTrac U.S. Institutional Investor & Cash Sales Report provides percentages of all sales that are sold to institutional investors and cash buyers, by state and metropolitan statistical area. Data is also available at the county and zip code level upon request. The data is derived from recorded sales deeds and loan data. Statistics for previous quarters are revised when each new quarterly report is issued as more deed data becomes available for those previous months.

Special note on methodology change in second quarter of 2014: RealtyTrac adjusted its methodology for calculating cash sales, changing how loan coverage was determined and eliminating data from one of the data providers used in the past.

Definitions
All-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.

Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in the last 12 months.

Report License
The RealtyTrac U.S. Residential & Foreclosure Sales report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Data Licensing and Custom Report Order
Investors, businesses and government institutions can contact RealtyTrac to license bulk foreclosure and neighborhood data or purchase customized reports. For more information contact our Data Licensing Department at 800.462.5193 or [email protected].

About RealtyTrac
RealtyTrac is a leading supplier of U.S. real estate data, with nationwide parcel-level records for more than 129 million U.S. parcels that include property characteristics, tax assessor data, sales and mortgage deed records, Automated Valuation Models (AVMs) and 20 million active and historical default, foreclosure auction and bank-owned properties. RealtyTrac's housing data and foreclosure reports are relied on by many federal government agencies, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
StarNet Communications Corp has announced the addition of three Secure Remote Desktop modules to its flagship X-Win32 PC X server. The new modules enable X-Win32 to safely tunnel the remote desktops from Linux and Unix servers to the user’s PC over encrypted SSH. Traditionally, users of PC X servers deploy the XDMCP protocol to display remote desktop environments such as the Gnome and KDE desktops on Linux servers and the CDE environment on Solaris Unix machines. XDMCP is used primarily on comp...
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
SYS-CON Events announced today Telecom Reseller has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
SYS-CON Events announced today that Adobe has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Adobe is changing the world though digital experiences. Adobe helps customers develop and deliver high-impact experiences that differentiate brands, build loyalty, and drive revenue across every screen, including smartphones, computers, tablets and TVs. Adobe content solutions are used daily by millions of co...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
As the world moves toward more DevOps and Microservices, application deployment to the cloud ought to become a lot simpler. The Microservices architecture, which is the basis of many new age distributed systems such as OpenStack, NetFlix and so on, is at the heart of Cloud Foundry - a complete developer-oriented Platform as a Service (PaaS) that is IaaS agnostic and supports vCloud, OpenStack and AWS. Serverless computing is revolutionizing computing. In his session at 19th Cloud Expo, Raghav...
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...