Newspaper article Sarasota Herald Tribune

All-Cash Deals Are Increasing

Newspaper article Sarasota Herald Tribune

All-Cash Deals Are Increasing

Article excerpt

Investors continue to steer Southwest Florida's housing recovery with all-cash deals, which in many cases are squeezing traditional owner-occupiers out of the market, a new study shows.

Many of those purchases stem from institutional investors, who are gobbling up foreclosures and short sales at a ferocious pace for use as rentals -- a phenomenon that first began elevating the market almost a year ago.

That investor thirst, coupled with tight lending restrictions, have made cash-centric real estate transactions more prevalent in Southwest Florida than perhaps at any time before, according to industry researcher RealtyTrac Inc.

"It's a bit of a paradigm shift in the market," said Daren Blomquist, vice president at RealtyTrac. "Cash represents a very large portion of current real estate sales, especially in many Florida markets, like Sarasota. I also think buyers are out there too, and many of them are willing to pay cash, if they're able to."

Buyers closed on 2,091 homes in Sarasota, Manatee and Charlotte counties in July, well outpacing numbers from a year ago.

Of those, buyers paid cash on 62 percent of the sales in Sarasota, 65 percent in Manatee and a whopping 74 percent in Charlotte -- all above the national average of 40 percent in July, according to figures released Wednesday by RealtyTrac.

Those gains were led largely by bulk-investment buyers, such as Wall Street's Blackstone Group and rival Colony Capital of California.

Those institutional investors accounted for 7 percent of all purchases in Sarasota last month, 11 percent in Charlotte and 20 percent in Manatee, which had one of the highest rates in the country. Atlanta topped the list, with 25 percent, while Tampa Bay had 22 percent.

RealtyTrac classified investor deals as sales to non-lending entities that purchased at least 10 properties in the last 12 months.

Baby boomers, too

The recent influx of cash also has been fanned by baby boomers, who have regained enough equity to sell houses up north to finance Sunshine State retirements, Blomquist said.

Bank-owned listings and short sales, which also tend to draw more cash offers than mortgage-backed buyers, both have risen steadily over the year, as well. …

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