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All-Cash Sales Share Continues Year-Over-Year Decline

cash home salesThe share of all-cash home sales continued its streak of annual declines in October but remained elevated compared to pre-crisis levels, according to data released Wednesday.

In a post on the company's blog site, CoreLogic estimated that cash transactions accounted for 35.5 percent of total home sales in October 2014, down from 38.7 percent the year prior. The decline continued a downward trend started in January 2013, making October the 22nd straight month to see cash sales decline on an annual basis.

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

"At the current rate of year-over-year decrease, the cash sales share should be back to pre-crisis levels in 2017," estimated Molly Boesel, senior economist for CoreLogic.

While cash sales share did tick up from September to October, CoreLogic says the increase "is typical for the fall and winter months." Due to seasonal influences on the housing market, the company says cash sales share comparisons are best made on a year-over-year basis.

As is typical, REO sales accounted for the majority of cash sales in October, edging up slightly from September to a share of 58.7 percent. Since REO sales make up only a small share of total home sales (7.9 percent in October), Boesel noted that those transactions "did not have a large influence on the overall cash sales share."

Resales made up the second biggest slice of all-cash transactions at 35 percent, followed closely by short sales at 33 percent. New home sales accounted for 16.8 percent of cash sales, meanwhile.

State-wise, Delaware held on to its spot as the No. 1 state for cash sales, with 58.3 percent of home sales transacted in cash. Alabama ranked second with a share of 51.3 percent, while Florida moved down a slot from September at a share of 51.1 percent. New York (44.4 percent) and Michigan (43.1 percent) rounded out the top five.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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