Do you know that when it comes to real estate investment, cash is king? According to a report from RealtyTrac, records show that from November last year, 38.1 percent of single family units and condominium purchases were made using cash. This number was up from only 29.8 percent in October, an article from Marketplace.org revealed.
Daren Blomquist, vice president of RealtyTrac, mentioned that this increase in the number of home buyers using cash may just be temporary and may be due to new federal rules that affect how the costs of loans are provided to buyers. Blomquist also said that these noticeable changes affected the loan process; home buyers that are using cash may have a bigger heads up on finance buyers compared to previous years.
The RealtyTrac VP also said that once buyers are used to new rules there is a possibility that the number of people using cash may slip back to its usual number which is around 30 percent considered to be the normal level since 2000. But there is a catch to his statement, "In terms of global economic stability," he said.
This is definitely a huge deal of a catch considering that there are more and more wealthy home buyers buying real estate in the US. Real estate experts also said that this rhythm is unlikely to stop soon.
Anthony Sanders, professor of real estate finance at George Mason University has the following to say about the current cash payout in US real estate market, "I don't see any bottom to the Chinese meltdown."
"So I think this could, actually, very easily last through the year."
Properties that have been purchased using cash are found mainly on the US coasts. Prominent properties in key US cities such as Los Angeles, New York and Washington are considered prime markets where cash is king.
