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Cash Buyers Are Driving Home Prices Downward

This post was written by jd on January 24, 2012
Posted Under: Real Estate

 

Cash buyers are sending home values down much lower than they otherwise would be, suggests a new survey by Campbell Inside Mortgage Finance, which polled more than 2,500 real estate agents nationwide.

In its December Housing Pulse Tracking Survey, the company found that investors accounted for one out of three real estate transactions last month, and about 74 percent of those purchases by investors were made using all cash.

Investors have an over-sized command on the market since their ability to pay cash in the majority of transactions puts undue downward pressure on home prices,” an article at Housing Predictor notes about the study.

Cash buyers can be attractive to home sellers, banks, and mortgage companies, since they do not usually come with contingencies, require extra time to secure financing, and tend to move more quickly to closing. As such, cash buyers tend to make purchases at lower prices than those who may need financing or come with contingencies.

Source: “Cash Buyers Pushing Home Prices Lower,” Housing Predictor (Jan. 24, 2012)

 

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