The percentage of homes sales that were all cash transactions increased in November, bucking a long term trend. CoreLogic, in its monthly cash sales report said cash sales represented 36.4 percent of all home sales during the month, an increase of 2.5 percentage points from October. From January 2013 until last October the percentage of cash sales had declined an average of 2.7 points a month over a range of -1.4 to -5.1 points.
CoreLogic said the cash sales share typically increases in November which makes it important to look at comparisons on an annual basis. That November to November decrease was the lowest in nearly three years, down 0.7 percentage points from 37.1 percent. The November 2015 spike in the cash sales percentage was likely due, CoreLogic said, to the new mortgage disclosure rules (TRID) which went into effect for mortgage applications filed in October. Some transaction settlement dates in November were delayed due to the industries learning curve with the new procedures, lowering the overall number of sales involving mortgages.
As usual the largest cash share was for real estate-owned (REO) properties at 63.2 percent. These sales however represented only 8.7 percent of total sales so the impact on the overall cash share was small. When cash sales were at their peak, making up 46.6 percent of the market in January 2011, REO sales made up almost 24 percent of all home sales.
The second highest share of cash sales was for resales at 35.7 percent followed by short sales at 34.3 percent. Only 16.7 percent of new home sales were for cash. Resales typically make up the majority of home sales (about 78 percent in November 2015), and therefore have the biggest impact on the total cash sales share. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent.
Michigan had the largest cash sales share of any state at 53.4 percent, followed by Alabama (51.4 percent), Florida (50.2 percent), Kentucky (49.1 percent) and New York (47 percent). Of the nation's largest 100 Core Based Statistical Areas (CBSAs)2 measured by population, Detroit had the highest cash sales share at 61.5 percent, followed by four Florida metros, West Palm Beach-Boca Raton (53.4 percent), Miami (52.5 percent), Fort Lauderdale (50.4 percent) and Sarasota-Bradenton (50.1 percent). Syracuse, N.Y. had the lowest cash sales share at 13.1 percent.