Question:
“I keep hearing about homes selling with people paying all cash and not getting a loan. Is it possible to buy a home if I need to get a loan and still compete with cash buyers? And why are there so many cash buyers?”
Answer:
Bad news / good news if you need to get a loan to buy.
First the bad…
– Nationally, an incredibly high 42.1% of buyers across the U.S. have been buying with all cash the past year.
Now the good…
– I don’t have hard stats, but the cash-buyer % is lower in San Diego. That’s because a) we have higher home values than most of America, so less people can pay cash & b) our market has recovered sooner, so there are less cash bargain hunters.
– The cash-buyer % in San Diego has been dropping over time. A year ago, half the offers I saw were all cash. Now, I’d say it’s closer to 25%.
– Most cash buyers are buying fix/flip properties. So if you’re not buying a fixer-upper, you’re less likely to compete with cash buyers.
Why so many cash buyers?
When your bank pays you 0.2%, CDs are paying 1-2%, and people are nervous about the stock market, what’s the other popular place to invest your cash for a decent return?
Real estate.
