All-cash home sales in the U.S. declined in the second quarter of 2014, reaching its lowest level in three years as big players failed to find dream properties in the country, according to RealtyTrac's latest property report.
Fewer Americans bought homes through all-cash deals with just 37.9 percent of the total sales accounting for complete cash transactions. The figure is below the 42 percent recorded last month, but is above the 36 percent recorded at the same time last year.
The report also revealed that institutional investor (firms that invest in 10 or more properties in a year) purchases only accounted for 4.7 percent of the total single-family home sales - a 5.3 percent decline on a quarter-on-quarter basis.
According to RealtyTrac, all-cash sales have made up for 39 percent of the total home sales in the last ten quarters. But in this quarter, the trend seems to have changed its course.
Usually, it is the wealthy Americans and foreign buyers who make all-cash purchases. But of late, the big players haven't been able to find dream properties in the country. A significant fall in purchases from institutional investors also spurred the decline.
Experts say that this trend will have both a good and bad effect on the housing market now. Daren Blomquist, vice president of RealtyTrac, explains that the good news is a lack of interest from all-cash buyers should help loosen inventory and give first time homebuyers more opportunities. Lending should also improve.
The bad news is that "first time homebuyers and other non-cash buyers may already be priced out of the market thanks to the rapid run-up in home prices over the past two years in many areas," Blomquist added.
But, according to CNN Money, all-cash transactions still rule in several U.S. markets, mainly because sellers have more faith in these big players and don't have to wait to cash in on the deal.
Cities like Las Vegas, Cleveland, Detroit and Kansas have all seen 45 percent of their homes sell in all-cash deals.
A recent report by the National Association of realtors found the most popular US destinations for foreign buyers. The report followed another research that showed foreigners made up seven percent of the total home sales in the country.
