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U.S. Cash Sales Fall 3 Percent Annually, Miami Still Lead Market

Cash Sales Accounted for 34 Percent of All U.S. Home Sales

Irvine, Ca-based CoreLogic is reporting this week that cash sales accounted for 33.9 percent of total U.S. home sales in October 2015, down 2.6 percentage points from 36.4 percent in October 2014.

On a month-over-month basis, the cash sales share increased by 1.4 percentage points in October 2015 compared with September 2015. The cash sales share typically increases month over month in October, and due to seasonality in the housing market, cash sales share comparisons should be made primarily on a year-over-year basis.

The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. If the cash sales share continues to fall at the same rate it did in October 2015, the share should hit 25 percent by mid-2018.

Real estate-owned (REO) sales had the largest cash sales share in October 2015 at 59.7 percent. Resales had the next highest cash sales share at 33.2 percent, followed by short sales at 31.3 percent and newly constructed homes at 16.7 percent. While the percentage of REO sales that were all-cash transactions remained high, REO transactions accounted for only 7.3 percent of all sales in October 2015. In January 2011 when the cash sales share was at its peak, REO sales represented 23.9 percent of total home sales. Resales typically make up the majority of home sales (about 81 percent in October 2015), and therefore have the biggest impact on the total cash sales share.

Alabama had the largest cash sales share of any state at 51.7 percent, followed by Florida (46.7 percent), New York (46.3 percent), West Virginia (44.4 percent) and Indiana (40.8 percent).

Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Miami-Miami Beach-Kendall, Fla. had the highest cash sales share at 51.6 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (50.9 percent), Detroit, Mich. (50 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (49 percent) and Philadelphia, Pa. (48.9 percent). Syracuse, N.Y. had the lowest cash sales share at 13.9 percent.