The share of homes paid for with cash in the Charlotte area continues to be lower than the national average, according to real estate information and analytics provider CoreLogic.
Cash sales in the Charlotte-Concord-Gastonia area accounted for 27.2 percent of all home sales in November, down from 32.4 percent in November 2014. Cash sales comparisons are most relevant on a year-over-year basis due to the seasonality of the housing market, according to CoreLogic.
The drop has coincided with a decline in institutional investor activity in the area. According to RealtyTrac, institutional investor transactions fell to 4.4 percent of all homes purchased in the region last year. That compares with 10.4 percent in 2014 and 12.1 percent in 2013.
Institutional investors, who often pay for homes in cash, jumped into the local market several years ago because the area’s fast-growing demographics and relatively low home prices translated into potential long-term gains from the rental market. Since then, however, the supply of homes for sale has dwindled to historic lows, and prices have steadily appreciated.
Others who are more likely to use cash to purchase a home include retirees and foreign buyers.
The national share of cash sales in November was 36.4 percent, down from 37.1 percent a year earlier, according to CoreLogic. The share of cash sales prior to the recession averaged about 25 percent nationally, and peaked in January 2011 at 46.6 percent of total home sales.
Foreclosures accounted for the largest share of cash sales in November, with 63.2 percent of foreclosures being paid for in cash. Resales had the second-highest share, at 35.7 percent, followed by short sales at 34.3 percent, and newly constructed home sales at 16.7 percent.
Although the share of foreclosure sales that were paid for with cash remained high, foreclosures accounted for only 8.7 percent of all U.S. home sales in November. In comparison, at the time cash sales peaked in January 2011, foreclosures made up 23.9 percent of all home sales.
Resales were responsible for 78 percent of home sales in November, according to CoreLogic, and have the biggest impact on the share of total cash sales.
In North Carolina, 38 percent of purchased homes were paid for in cash in November. Michigan had the largest share of cash sales in the country, at 53.4 percent; followed by Alabama, at 51.4 percent; Florida, at 50.2 percent; Kentucky, at 49.1 percent; and New York, at 47 percent.
Of the nation’s 100 most-populated metro areas, Detroit had had the highest share of cash sales, at 61.5 percent. Syracuse, New York, had the lowest cash-sales share, at 13.1 percent.