Nearly half of residential sales in December were cash only

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Forty-six percent of all residential sales in the Charlotte-Gastonia-Concord area were all cash in December 2013, according to an analysis by RealtyTrac. The company includes single-family homes, condos and town homes in its residential sales counts.

Charlotte Regional Realtor Association President Joe Rempson says it’s a reflection of institutional investor activity in the market, which he sees as a good thing that has led to price increases and list-to-close decreases. Rempson thinks that institutional investors in the future will take a smaller slice of the residential market, having already gobbled up a lot of the area’s distressed sales. “There just aren’t as many distressed sales,” he said.

Nancy Braun, broker-in-charge at Showcase Realty, is seeing cash-only sales transaction every day. She attributes some of the activity to institutional investors who are in the Charlotte market with “oodles of cash,” but said it’s also owner-occupant buyers. “Part of it is (the buyers) don’t want to go through the difficulty of getting a loan.”

Heightened competition in the market with many multiple offers also makes cash-only buyers much more attractive, according to Braun. She said one well-priced, nice home in north Charlotte currently has 26 offers on it.

Nadine Deason of Team Nadine at Keller Willliams in Lake Norman is not at all surprised with the volume of cash sales. It’s a trend she’s been seeing in the recent past with buyers having trouble getting loans, particularly if they’re self-employed. Referencing the new mortgage regulations enacted earlier this month, Deason thinks the housing market will only see more cash-only activity.

For the month in Charlotte, 14.1 percent of sales were by institutional investors, 4.4 percent were short sales, 10.6 percent were real estate owned sales, and 2.5 percent were sales at foreclosure auctions.

Deason said there’s some lightness in the luxury market in Lake Norman, and more resort-style areas like Asheville and Charleston, but real estate activity was brisk in November for homes in the $400,000 to $500,000 range. “(I had the) best November ever, even better than 2005 and 2006,” Deason explained.

For the entire country, RealtyTrac found that 29.1 percent of residential sales were all-cash purchases in 2013. It noted that the percentage trended higher during the second half of the year. The 29.1 percent in cash-only nationwide sales in 2013 was up from 19.4 percent in 2012 and 20.6 percent in 2011.

The Queen City had 42,126 annualized sales in December 2013, including actual sales deeds as well as expected sales records to be received in future months. Sales for the month increased 2 percent from November 2013 and 16 percent from December 2012. RealtyTrac reported a median sales price of $150,000 for December, a 1 percent increase from November and 7 percent from December 2012. The median price of a distressed sale property was 38 percent lower, or $93,000.

Interestingly, the report showed that the percentage of distressed sales in the U.S. as a whole were up for the year, despite a seven-year low in foreclosure activity. Short sales, foreclosure auction sales and bank-owned sales accounted for 16.2 percent of all residential property sales for the year, up from 14.5 percent in 2012 and 15.2 percent in 2011.

“While foreclosure sales did trend lower in the second half of the year, there are still more than 1.2 million properties in the foreclosure process or bank-owned providing a sizable pool of inventory that the housing market is in the process of absorbing,” explained Daren Blomquist, vice president at RealtyTrac. “Meanwhile, non-distressed sellers have not listed their homes for sale in droves, helping to keep the distressed share of sales at a stubbornly high level.”

Overall, U.S. residential properties sold at an estimated annual pace of 5,167,255 in December, a decrease of less than 1 percent from the previous month and a 10 percent from December 2012.

The median sale price of all U.S. residential properties in December was $168,391, up 2 percent from December 2012. For properties in foreclosure of bank-owned, the median sales was $108,494 in December, 38 percent below the median sales of $174,401 for a non-distressed residential property.

Other findings from the report:

• 9.3 percent of all U.S. residential in December were bank-owned, up from 8.7 percent from the previous month and 9.2 percent from December 2012.
• Short sales made up 5.7 percent of all U.S. residential sales in December, up from 5.1 percent from the previous month but down from 6.7 percent in December 2012.
• Sales to third party investors at foreclosure auction accounted for 1.2 percent of all residential home sales for the month, up from 1.1 percent in November 2013 and up from 0.8 percent from the previous December.
• For all 2013, institutional investors or buyers who acquired at least 10 properties for the year represented 7.3 percent of all residential sales, up from 5.8 percent the previous year and 5.1 percent in 2011.