Cash Deals Are The New Normal In Real Estate (Sarasota: bank owned, short sale)

[wondermint2]

Cash deals are the new normal in real estate | HeraldTribune.com (click for full article)

"Cash deals — where individuals or investor groups whip out a checkbook to buy a home — now account for an unprecedented two-thirds of all Southwest Florida's residential deals.

The trend, which has been growing since 2008, is doing a favor for a troubled market, both by taking out inventory and by pushing prices up.

But the same practice, along with the unlikely bidding wars that has been created for individual properties, is also squeezing out some traditional buyers."

[floridaboy239]

oh yea especially if its a bank owned propery

[FLSnowbirds]

We paid cash for a second residence and it made a difference because these people were upside down and ready to move into short sale/foreclosure status etc. Closed fast with no appraisal, just an inspection.

[gettinoutofjersey]

what happens when all the buyers with cash run out of cash or have fulfilled their needs. the cash they are spending on the house purchase here is more than likely all going to the banks. none of that money is going to the homeowner as they are more than likely under water. that does zip for the local economy. no cash infusion. no profits

[Chester Burnett]

I've been accused of many things but being normal was never one of them. My wife and I just closed on a lovely 3/2 in central Sarasota by means of a conventional loan. Non short sale/foreclosure. Our credit is decent but nothing to shout about. I've been at my job less than a year but my wife has 5 years in. I think what saved it for us was a good debt to income ratio. We have been busy this week flooding the local economy with our hard earned dollars leaving behind big smiles at furniture and home improvement stores, restaurants and grocery stores. Take that cash buyers and investment groups!

[wondermint2]

High rents, tight credit put many at the mercy of the market - Life Inc. (click for full article)

"One night last spring, David Hall returned home to his studio apartment outside Boston to learn that his monthly rent had spiked from $725 to $995.

It would be much cheaper for the maintenance manager to buy a nearby starter house than to stay put. But his mortgage broker told him that while his credit score was good, it was not high enough to meet banks' tough standards, he said.

"I know if I walk into a bank, they are just going to laugh at me," Hall says. "So I'm stuck."

He is not alone.

Five years after the housing bubble burst, the United States is in the midst of a housing affordability crisis. Home prices have fallen a third from their peaks, but many Americans cannot benefit because they cannot get a mortgage.

With credit tight, many consumers have no choice but to rent. Others who can afford to buy are also renting, because they view real estate as a lousy investment. With this increased demand, rents in some cities have jumped by double-digit percentage rates."

[yellowsky]

Good read, Wondermint. Thanks.