Cash Sales 35 Percent of U.S. Home Sales, Philadelphia Top Market
According to CoreLogic, cash sales made up 34.6 percent of total U.S. home sales nationally in March 2015, down from 39 percent in March 2014. The year-over-year share has fallen each month since January 2013, making March 2015 the 27th consecutive month of declines. Month over month, the cash sales share fell by 2.8 percentage points. Due to seasonality in the housing market, cash sales share comparisons should be made on a year-over-year basis.
The cash sales share peak occurred in January 2011 when cash transactions made up 46.5 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 March 2015, the share should decrease to 25 percent by mid-2016.
Real estate-owned (REO) sales had the largest cash sales share in March 2015 at 56.2 percent, followed by resales (34.5 percent), short sales (31.6 percent) and newly constructed homes (14.9 percent). While the percentage of REO sales that were all cash transactions remained high, REO transactions made up only 8.4 percent of all sales in March. In January 2011, when the cash sales share was at its peak, REO sales made up 23.9 percent of total home sales. Resales make up the majority of home sales at about 80 percent, and therefore have the biggest impact on the total cash sales share.
Florida had the largest share of any state at 51.8 percent, followed by Alabama (50 percent), New York (46.5 percent), New Mexico (42.2 percent) and Michigan (41.3 percent). Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Philadelphia had the highest share of cash sales at 60.7 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (59.9 percent), North Port-Sarasota-Bradenton, Fla. (59.5 percent), Cape Coral-Fort Myers, Fla. (59.3 percent) and Miami-Miami Beach-Kendall, Fla. (58.3 percent). Colorado Springs, Colo. had the lowest cash sales share at 16.1 percent.