Falling home prices are spurring an increase in all-cash home sales in markets that have been hardest hit by the foreclosure crisis, an indication that bargain hunters have descended on the markets looking for deals.
Cash sales are up even more in many Florida markets. In Miami, cash offers accounted for 30% of sales last month, according to a report by Thomas Lawler, a housing economist based in Leesburg, Va. That share more than doubled in Gulf Coast communities such as Punta Gorda and Englewood, Fla., where cash financing accounted for 65% and 60% of sales, respectively.
Cash sales are typically higher in Florida than in other markets, in part because the state attracts lots of foreign buyers and retirees who are more likely to plunk down their savings without taking out a mortgage. But a number of cash buyers these days, in Florida and elsewhere, are also investors scooping up distressed properties and affluent families seeking relatively inexpensive vacation homes.
In some cases, cash buyers are finding that they can get a deeper discount by making an all-cash offer. In markets with a glut of foreclosed homes, lenders are becoming more aggressive to sell "simply because there aren't enough first-time home buyers around to sop up the excess supply," Mr. Lawler says.
source: wsj.com
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