Chicago Relocation

Why are cash buyers increasing…?

June 9, 2014

Filed Under
chicago foreclosure
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John D’Ambrogio

…When rates are still at historic lows and institutional investing seems to be fading?

Well, info recently released for RealtyTrac, which crunches housing data, the percentage of ‘all cash’ buyers hit a new high this year.

It used to be assumed this would be the result of serial or institutional investors – those who buy double digit numbers of properties each year with the goal of holding and renting.

However, as prices have jumped (then inched) upwards, institutional buyers have been backing off.  They are all about the numbers and if the numbers don’t make sense for them and their investors they simply move on.  I have certainly seen this firsthand in the foreclosure and low end market.  Last year’s deals are long gone.

RealtyTrac’s position is that it’s everyday consumers who were able to stock away cash (or perhaps are purchasing in instruments such as IRAs) and small investment groups (with perhaps more modest return goals).

Regardless, cash is still King.  It never really wasn’t, was it?