June’s Low Cash Sales Are a Blast from the Past

June 2016 marks the first time the cash sales share has been below 30 percent since late 2007. The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. According to CoreLogic’s most recent Cash Sales Report, if the cash sales share continues to fall at the same rate it did in June 2016, they predict the share will hit 25 percent by mid-2018.

Cash sales accounted for 29.3 percent of total home sales in June 2016, a drop from June 2015’s percentage of 31.8. On a month-over-month basis, the cash sales share decreased by 0.9 percentage points in June compared with May.

Real estate-owned (REO) sales had the largest cash sales share in June at 56.2 percent with resales coming in second at 28.9 percent. Short sales followed closely behind at 27.7 percent and newly constructed homes carried the rear at 15.2 percent.

CoreLogic reports that while the percentage of REO sales within the all-cash category remained high, REO transactions accounted for only 4.9 percent of all home sales in June 2016. Instead, resales typically make up the majority of home sales, totaling approximately 84 percent in June 2016, and therefore have the biggest impact on the total cash sales share.

New York had the largest cash sales share of any state at 45.3 percent, followed by Alabama with 44.6 percent, Florida with 40.6 percent, Oklahoma with 38.6 percent, and Indiana with 35.7 percent.

Of the nation’s largest 100 Core Based Statistical Areas (CBSAs) measured by population, Detroit-Dearborn-Livonia, Mich. had the highest cash sales share at 56.5 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Florida at 49.3 percent, Miami -Miami Beach-Kendall, Florida at 47.9 percent, North Port-Sarasota-Bradenton, Florida at 47.7 percent, and Cape Coral-Fort Myers, Florida at 46.1 percent. The report notes that Syracuse, New York had the lowest cash sales share at 12.6 percent.

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