Are you brave and have the gift of endurance? If your answer is yes, then, you have the basic qualifications to enter into today’s home purchase finance market. Many of our clients endured failed offers on several homes because they were beat out of their purchase bid by multiple cash offers. Creatively, some of our clients had the resources to pay cash for their purchase and then refinance their just purchased home to pull back out purchase cash. Others have used the equity line on their current residence to purchase a second home “all cash”. And, once this second home escrow closed, these buyers refinanced to replenish their cash. Unfortunately, the greater majority does not have the available cash to purchase a home. The greater majority needs mortgage financing to purchase their home. The greater majority continues to get beat up by “all cash” offers.
On the average approximately 43% of all first quarter 2014 United States, US home purchases were all cash. Some communities in the US experienced 62% to 74% of their first quarter 2014 home purchases all cash. This 43% number appears ginormous as compared to last year’s 2013 all cash 19% of all US home purchased. Housing inventory is down significantly in this first quarter 2014. And, because of this extremely low inventory, this 43% number appears much larger than it actually is. The number of all cash offers may have peaked; providing hope of light at the end of this dark purchase offer frustration tunnel.
The good news is that most of the “cash” investors have left your housing market. As the year 2014 progresses the housing inventory will rise slightly and the number of “all cash” offers to purchase will decrease.
What about 2014 housing price increases? Well, stay tuned for my blog next week titled “The Candy Bar—same price, less value.”