Housing Trends: Cash Sales Update April 2016

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Cash Sales Accounted for 32 Percent of All Home Sales in April

Cash sales accounted for 31.6 percent of total home sales in April 2016, down 2.8 percentage points year over year from April 2015. On a month-over-month basis, the cash sales share fell by 1.6 percentage points in April 2016 compared with March 2016. For the first four months of 2016, the cash sales share averaged 33.9 percent, the lowest start to any year since 2008. The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. If the cash sales share continues to fall at the same rate it did in April 2016, the share should hit 25 percent by mid-2018.

Figure 1 shows the historical trend in cash sales share by sale type. Real estate-owned (REO) sales had the largest cash sales share in April 2016 at 56.7 percent. Resales had the next highest cash sales share at 31.3 percent, followed by short sales at 28.6 percent and newly constructed homes at 14.5 percent. While the percentage of REO sales that were all-cash transactions remained high, REO transactions accounted for only 5.7 percent of all sales in April 2016. In January 2011 when the cash sales share was at its peak, REO sales represented 23.9 percent of total home sales. Resales typically make up the majority of home sales, totaling about 83 percent in April 2016, and therefore have the biggest impact on the total cash sales share.

Cash Sales Percentage

Cash Sales Percentage

Figure 2 shows the cash sales share by state[1] for April 2016. Florida had the largest cash sales share of any state at 45.5 percent, followed by Alabama (45.3 percent), New York (44.2 percent), New Jersey (38.2 percent) and Indiana (38 percent). Of the nation’s largest 100 Core Based Statistical Areas (CBSAs)[2] measured by population, Philadelphia, Pa. had the highest cash sales share at 57.9 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (54.4 percent), Cape Coral-Fort Myers, Fla. (51.7 percent), North Port-Sarasota-Bradenton, Fla. (51.6 percent) and Detroit-Dearborn-Livonia, Mich. (50.8 percent). Syracuse, N.Y. had the lowest cash sales share at 13.3 percent.

1 Adequate data was not available for South Dakota, Vermont and West Virginia, and as such, cash sales shares are not reported for these states.

2 The cash sales share for CBSAs listed in this report was calculated using cumulative sales from the past three months.

​© 2016 CoreLogic, Inc. All rights reserved.


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