CoreLogic: Almost 60% Of REO Sales In October Were Cash

Posted by Patrick Barnard on January 20, 2015 No Comments
Categories : Mortgage Servicing

Cash sales made up 35.5% of total home sales in October 2014, down 38.7% compared to October 2013, according to CoreLogic.

Real estate owned (REO) sales had the largest cash sales share in October at 58.7%. This was followed by re-sales (35%), short sales (33%) and newly constructed homes (16.8%).

While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 7.9% of total sales in October, CoreLogic's Molly Boesel writes in a recent blog post.

In January 2011, when the cash sales share was at its peak, REO sales made up 23.9% of total sales, Boesel says.

October marked the 22nd-consecutive month that cash sales declined. Month over month, cash sales ticked up by half of a percentage point.

Boesel points out that cash sales are seasonal and, therefore, should be analyzed on a year-over-year basis as opposed to a month-over-month basis.

Cash sales peaked in January 2011 when they made up 46.4% of total home sales. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%, she reports.

At the current rate of year-over-year decrease, the cash sales share should be back to pre-crisis levels in 2017, Boesel says.

States that had the highest percentage of cash sales in October were Delaware (58.3%), Alabama (51.3%), Florida (51.1%), New York (44.4%) and Michigan (43.1%).

Metropolitan areas that had the highest share of cash sales were Miami-Miami Beach-Kendall, Fla. (56.6%); West Palm Beach-Boca Raton-Delray Beach, Fla. (56.1%); Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (55.6%); Detroit-Dearborn-Livonia, Mich. (55.5%); and Cape Coral-Fort Myers, Fla. (55.2%). The Washington-Arlington-Alexandria, D.C.-Va.-Md. area had the lowest cash sales share at 16.0%.

Register here to receive our Latest Headlines email newsletter

Leave a Comment