Cash sales to reach pre-crisis levels by 2017

by MPA15 Jan 2015
Cash sales made up 35.5% of total home sales in October 2014, down from 38.7% in October 2013, according to CoreLogic. At the current rate of decline, cash sales share should reach pre-crisis levels by 2017.

The year-over-year share has fallen each month since January 2013, making October the 22nd consecutive month of declines. Month over month, the cash sales share ticked up by half of a percentage point, as is typical for the fall and winter months, according to CoreLogic.

Cash sales peaked in January 2011 when cash transactions made up 46.4% of total home sales. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%. At the current rate of year-over-year decrease, the cash sales share should be back to pre-crisis levels in 2017.



Real estate owned (REO) sales had the largest cash sales share in October 2014 at 58.7%, followed by re-sales (35%), short sales (33%) and newly constructed homes (16.8 %). While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 7.9% of total sales in October and, therefore, did not have a large influence on the overall cash sales share. In January 2011, when the cash sales share was at its peak, REO sales made up 23.9% of total sales.
 

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