Nearly a quarter of Seattle homes were bought with cash this year

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Realtor.com COVID-19 Housing Market Update - 7/16/21

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More than 30% of homes in Tucson, Phoenix are bought with all cash | AZ Big Media

AZ Big Media 16 July, 2021 - 09:10pm

Nearly one-third (30%) of U.S. home purchases this year were paid for with all cash, according to an analysis from Redfin, the technology-powered real estate brokerage. That’s up from 25.3% during all of 2020 and represents the largest share since 2014, when 30.6% of homes were purchased with all cash. Redfin analyzed county records published from January 2021 to April 2021.

In Tucson, 35.1% of home sales are made to cash buyers. In Phoenix, 32.3% of the home sales are cash deals.

Cash purchases are on the rise as Americans reap the benefits of a strong stock market. The S&P 500 Index has gained 36% in the past 12 months alone, as of July 14, 2021.

READ ALSO:  5 Arizona housing market predictions for 2021

“I’ve never seen more cash in Boise’s housing market than I’ve seen in the past year,” said Shauna Pendleton, a Redfin real estate agent in Idaho. “I just sold a $700,000 home to a cash buyer last week. The entire $700,000 came from his E*Trade account.”

Additionally, remote work has allowed homeowners in expensive cities, including San Francisco and New York, to sell their homes and move to less expensive areas, where they can often afford to buy properties in cash.

“Affluent homeowners in SeattlePortland and parts of California are selling their homes for $1 million or $2 million,” Pendleton said. “Then they’re coming to Boise, where they’re buying houses that are twice the size for half the price.”

Investors, who often pay in cash, are wading back into the housing market after pressing pause at the onset of the pandemic. U.S. home purchases by investors rose 2.7% year over year in the first quarter, marking the first period of growth since the coronavirus pandemic began.

The rise in all-cash home purchases is posing challenges for many first-time and lower-income homebuyers, who are having trouble competing with cash offers. While competition is easing slightly, about two-thirds of home offers written by Redfin agents still face bidding wars.

In the West Palm Beach, FL metro area, 52.6% of home purchases this year were paid for with all cash. That’s the largest share of the 86 metropolitan areas in Redfin’s analysis. Metros must have had at least 3,000 recorded home sales from Jan. 1, 2021 and April 30, 2021 to be included in this report. West Palm Beach was followed by Naples, FL (52.5%), Nassau County, NY (50.2%), North Port, FL (49.4%), Port St. Lucie, FL (46.2%), Greenville, SC (45.4%), Palm Bay, FL (44.1%), Cape Coral, FL (44.1%), Des Moines, IA (41%) and Jacksonville, FL (40.1%).

Florida is a big second-home market, and second-home buyers often pay with cash,” said Dina Blau, a Redfin real estate agent in the West Palm Beach area. “During the pandemic, folks also flocked to Florida to buy primary homes. They sold their houses in New YorkNew JerseyChicago or California and used the proceeds to pay cash for properties in Florida.”

Expensive California metros, where it’s more challenging to pay with cash because home prices are relatively high, were at the bottom of the list. In both San Jose, CA and Oakland, CA, 12.5% of reported home purchases this year used all cash—the lowest share of the metros Redfin analyzed. Next came Richmond, VA (16%), Los Angeles (16%), San Diego (16.2%), Lake County, IL (17.2%), Sacramento (17.7%), San Francisco (17.8%), Oxnard, CA (18%) and Bakersfield, CA (19.3%).

Still, buyers in California aren’t out of the woods, according to Steven Moore, a Redfin real estate agent in Los Angeles.

“I recently put in a $1.8 million offer on a home that was listed at $1.7 million,” Moore said. “The top 10 offers—out of 40 total—all came in at around $2 million and were all cash.”

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Nearly a quarter of Seattle homes are being bought with cash

Seattle PI 16 July, 2021 - 02:12pm

Breaking into Seattle's competitive housing market could be getting even harder. Not only are houses being snatched off the market in mere days for well over the asking price, but more and more are seeing all-cash offers.

According to a new report from Seattle-based Redfin, 23.8% of home sales in Seattle between January and April of this year were paid with cash. Nationally, one-third (30%) of homes were being purchased with cash, the highest level since 2014.

The trend is being driven by affluent Americans cashing in on the surging stock market and moving from expensive cities to more affordable areas. One of those areas seeing a surge of new buyers from expensive West Coast metros is Boise. Home values in the city have gone up 41.1% over the past year to a median value of $495,485, according to data from Zillow.

"Affluent homeowners in Seattle, Portland and parts of California are selling their homes for $1 million or $2 million," said Shauna Pendleton, a Redfin real estate agent in Idaho in a news release. "Then they’re coming to Boise, where they’re buying houses that are twice the size for half the price."

Several cities in Florida had over 40% of sales this year in cash, and experts largely attributed that trend to the fact that the state is a big second-home market.

The new surge in cash offers can pose difficulties for first-time homebuyers trying to break into the market who already need 12 years to save for a down payment on a typical starter home in Seattle. Those buyers might have trouble competing with all-cash offers, and with demand so high, two-thirds of home offers are facing bidding wars according to Redfin agents.

"It can be difficult to compete with an all-cash offer, but prospective buyers should keep in mind that these bids don’t always turn into purchases," Pendleton said. "Cash buyers are frequently the first to back out because they know they can compete in the market, so they easily get buyer’s remorse if they’re worried they might be overpaying for a house. That’s often good news for financed buyers because it means fewer bids to compete with."

Another Redfin report found that a record number of homes in the Emerald City are selling above their listing price, signaling a highly competitive market with bidding wars. More than 4,500 homes in the Seattle area have sold for at least $100,000 above the asking price so far in 2021, and 146 homes have sold for at least $300,000 above the asking price so far this year.

However, there might be some hope for homebuyers, as the latest market report from the Northwest Multiple Listing Service (NWMLS) found a significant increase in new listings last month, easing some of the pressure of the red-hot market. Listings for both single-family homes and condominiums were up 14.5% in June compared to May levels, a promising sign that relief might be on the way.

"Homebuyers will be happy to hear that between May and June the number of listings in King, Pierce and Snohomish counties rose, giving them more homes to choose from and possibly easing the pressure just a little," said Matthew Gardner, chief economist at Windermere Real Estate.

Callie is a web producer for the Seattle P-I focusing on local politics, transportation, real estate and restaurants. She previously worked at a craft beer e-commerce company and loves exploring Seattle's breweries. Her writing has been featured in Seattle magazine and the Seattle University Spectator, where she served as a student journalist.

The home-buying frenzy is cooling off – here's why

Fox Business 16 July, 2021 - 07:03am

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Sales of U.S. homes are on the decline, falling 1.2% from May to June — the biggest drop in almost a decade.

The dip in seasonally adjusted home sales marks the biggest decline during this time of year since 2012, which according to real estate brokerage Redfin suggests "the housing market frenzy may have peaked for the year."

In the month of June, the number of homes for sale also dropped, about 28% compared to a year earlier. This also marked another record low since 2012, when the real estate brokerage began tracking this data.

Even though home sales are on the decline "measures of completed home sales reflected the most competitive market on record in June," according to Redfin. 

Home sales are stalling because prices have skyrocketed to "beyond what many buyers can afford," according to Redfin chief economist Daryl Fairweather. 

According to Redfin data, the national median home-sale price in June hit a record high of $386,888, an increase of about 25% compared to a year earlier.

More than half of homes, about 56%, sold above their list price, up from 27% compared to a year ago.

Additionally, the typical home sold in June went under contract in just two weeks, a far cry from the previous mark of about 39 days a year ago. 

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Fairweather projected that prices will stabilize this summer, as more homeowners list their homes after "realizing they likely won't fetch a higher price by waiting longer to sell."

By 2022, Fairweather expects home sales to "rev back up," especially as rents continue to rise and owning a home becomes more appealing. 

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U.S. Home Sales Stall as Buyer Stampede Leaves Scant Inventory

Yahoo Finance 15 July, 2021 - 10:26am

Home transactions fell 1.2% in June from May, the largest drop for the month in records going back to 2012, according to seasonally adjusted data from Redfin Corp. The inventory reached an all-time low, with buyers scooping up properties in 14 days, the fastest pace ever.

Remote work combined with rock-bottom mortgage rates unleashed a stampede of buyers to the suburbs and affordable cities across the U.S. The median home price in June jumped 25% from a year earlier to a record $386,888.

“We entered a new phase of the housing market,” Redfin Chief Economist Daryl Fairweather said in a statement. “Prices have increased beyond what many buyers can afford.”

Values rose from a year earlier in all of the 85 metro areas Redfin tracks. The biggest jump was in Austin, Texas, at 43%. Following were Lake County, Illinois, with a 31% gain, and Phoenix, at 30%.

San Francisco, one of the country’s most expensive markets, had the smallest increase, at 2.6%.

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