| By Candy Evans 
| Posted Feb 10th 2011 2:13PM 0 Comments ∨ 
Could the "animal spirits" be coming back to the real estate market, or are we just getting blinded by the all-cash deals? It appears that one way to gauge the "bottom" of the real estate market to is tally up how many buyers are paying hard, cold cash for their transactions. And lately, those buyers are coming out of the woodwork in some of the hardest-hit markets.Consider these stats: Cash buyers represented more than half -- 50 percent -- of all transactions in the troubled Miami-Fort Lauderdale area last year, this according to Zillow.com. Looking back at 2006, cash was king on only 13 percent of deals. That cash was enough infusion to make Miami home prices actually rise 15 percent in 2010 from a year earlier, according to the Miami Downtown Development Authority.
Across the country in "everyone's underwater" Phoenix, the percentage of buyers in Phoenix paying cash hit 42 percent in 2010 -- more than triple the rate in 2008.
Looking at the national numbers, 28 percent of real estate sales were all-cash deals last year, according to the National Association of Realtors. Compare that to a rate of 14 percent in October 2008, which is when the NAR first started tracking the measure.
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See photos of homes for sale in your area and across the country on AOL Real EstateExperts say those figures may even be low. Visiting family in Las Vegas, Texas broker Charles Nuber says it is less expensive to purchase a home in Vegas than it is to lease one right now, so no wonder anyone with enough cash might want to strike a deal."The foreclosure rate is super-high here," he says. "The agent I spoke to said something like 8 out of 10 homes are foreclosed or in the pipeline to be foreclosed on."
Sure enough, the Greater Las Vegas Association of Realtors say home sales fell in the market in January, as cash buyers swooped up 51 percent of the homes sold. Over 2,500 single-family homes were sold in January at a median price of $125,000, which is down nearly 20 percent compared to December. Greater Las Vegas Association President Paul Bell told the Las Vegas Sun that most investors are renting the homes. Investors, he says, will keep paying cash as long as lending standards stay tight, foreclosures toss homes into the market, and prices stay low.
Cash buyers often command good deals, as much as 5 percent to 10 percent more off the asking price. Why? Because, say Realtors, the sellers know they can close smoothly and more quickly, and not worry about a last-minute glitch in the appraisal, an underwriter not liking the mortgagees W-2's or credit history. So are all cash offers lowest of the lowballs?
Surprise, surprise: Mohammed Siddiq, a Fort Lauderdale Realtor, says he has started to see bidding wars and slightly increasing prices.
No one yet has declared the bottom of the real estate market. Case-Shiller's index of housing prices in 20 cities showed a steep decline in prices until 2009, when they appeared to bottom and began to trend upward. But then in the second half of last year, prices began falling again. Take us here in Dallas: sales are down 11 percent, but -- go figure -- prices may be up 8 percent from January 2010. Fewer sales, higher home values: Experts at The Real Estate Center at Texas A&M University blame the decrease in sales on last year's First Time Homebuyer's credit, which jacked up sales artificially.
The increase in home values may have come from a flurry of high-end home sales that took place in late December from people wanting to wrap up sales by the end of the year. Good example: Teen idol Kevin Jonas, pictured above with his wife, Danielle, sold his Westlake, Tex., home in late December. The newlyweds were asking $2,200,000 and let the house go for $2 million on December 21!
For more on mortgages and related topics see these AOL Real Estate guides:
Stop Foreclosure Scammers Before They Scam YouHow to Get a Low Mortgage RateMortgage Jargon in Simple TermsHow Much Home Can I Afford?How to Buy ForeclosuresClosing Costs: How Much to BudgetGuide to Settlement and Escrow Tags: all-cash deals, bottom feeders, bottom of the real estate market, cash buyers hit real estate, homebuying strategies, jonas brothers, kevin jonas @import url(http://cdn11.surphace.com/widgets/sphereit/css?siteid=aol_realestate&v=20);Powered by SurphaceRelated Articles from AOL Real EstateAmerica’s Most Undervalued and Overvalued Cities24 days agoColorado Foreclosures: Time to Buy a Ski Home?30 days agoReal Estate 2011: No Rebound, No V36 days agoHousing Market 2011: A Spirited Dialogue46 days agoMore from Our PartnersBuyer’s market? Five reasons it’s so hard to buy a home right now–56 days agoHousing Reports: What the Real Estate and Mortgage Numbers Mean for You–56 days agoThe Housing Mess Hits One New York Town Hard–66 days agoThe 2011 Housing Market Outlook: Unsettled, Underwater and Unsold–67 days ago Add Your CommentsNew UsersReturningAIMFirst time? A confirmation email will be sent to you after submitting.
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