05-08-13 - dollar house40% of the properties sold in the U.S. over the summer were purchased in cash, up from 30% a year earlier, according to data published last week by RealtyTrac.

Most of it can be attributed to the opportunity real estate investors see in some markets. In some states, all-cash transactions seem to be the norm in other to lock in on a good deal and close quickly.

It should not be a surprise to hear that many of the states with the most homes sold for cash are among the ones hardest hit by the housing crisis. Home prices in Florida, Nevada and Michigan plummeted 50% or more 5 years ago or so. RealtyTrac CEO even chimed in and said it seemed to him that “both investors and regular buyers are seeing the most opportunity to jump in and buy, and are willing to use their own money”.

He went on to say, “in many of these states, a large segment of home sales are “distressed,” or homes purchased in foreclosure or owned by a bank. In Nevada, more than one in five homes sold in July were repossessed properties. This is likely affecting the number of homes being purchased with cash in two ways.

First, distressed homes can be bought at a significant discount — a median of just $52,000 in Michigan, for example. Second, “By nature, with distressed sales, besides the fact that it’s low-priced, when you buy a foreclosure property at the public foreclosure auction, in most states, you do have to pay cash there. No matter what the price, you do have to pay cash,” Bloomquist added.

cash buyers states investingStates Where Most Investors & Buyers Pay Cash

These are the states where the most real estate investors and home buyers pay cash at closing or auction.

10. Hawaii

  • Pct. cash sales: 44.3%
  • Median list price: $429,900 (the highest)
  • Pct. institutional sales: 2.3% (7th lowest)

9. New Jersey

  • Pct. cash sales: 45.0%
  • Median list price: $279,900 (5th highest)
  • Pct. institutional sales: 3.1% (9th lowest)

8. Ohio

  • Pct. cash sales: 47.0%
  • Median list price: $118,900 (the lowest)
  • Pct. institutional sales: 7.0% (23rd highest)

7. Arizona

  • Pct. cash sales: 47.8%
  • Median list price: $192,500 (22nd highest)
  • Pct. institutional sales: 14.6% (3rd highest)

6. Georgia

  • Pct. cash sales: 49.5%
  • Median list price: $169,500 (21st lowest)
  • Pct. institutional sales: 22.2% (the highest)

5. South Carolina

  • Pct. cash sales: 49.9%
  • Median list price: $164,039 (19th lowest)
  • Pct. institutional sales: 13.7% (6th highest)

4. Michigan

  • Pct. cash sales: 53.1%
  • Median list price: $129,900 (4th lowest)
  • Pct. institutional sales: 10.5% (9th highest)

3. Maine

  • Pct. cash sales: 59.5%
  • Median list price: $209,950 (20th highest)
  • Pct. institutional sales: 3.3% (10th lowest)

2. Nevada

  • Pct. cash sales: 64.4%
  • Median list price: $185,000 (24th highest)
  • Pct. institutional sales: 15.6% (2nd highest)

1. Florida

  • Pct. cash sales: 65.8%
  • Median list price: $159,900 (18th lowest)
  • Pct. institutional sales: 14.4% (4th highest)

Good real estate investments deals can be found almost anywhere – but the above states seem to be attracting cash buyers and are ripe with opportunity. Good Luck!

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