Money talks: One-third of home sales all cashJuly 3, 2013 @ 7:51 am (Updated: 9:08 pm - 7/3/13 )
All-cash offers accounted for 33 percent of home sales in the National Association of Realtors' May 2013 Confidence Index.
The majority of those all-cash offers came from investors and international homebuyers.
All-cash offers can represent stiff competition for traditional buyers. For example, first-time homebuyers, who are already facing low inventories and rising home prices, view all-cash offers as one of their biggest competitions in the market today.
But for a seller, an all-cash deal is attractive, cutting out potential obstacles in making it to closing. "If you own a home and are selling yourself, it's probably easier if someone pays you cash - it cuts out the messiness and having the homebuyer get approved for a loan," said Patrick Newport, U.S. economist at IHS Global Insights.
A high number of all-cash offers in the housing market can "signal a housing market that people are more willing to invest in," said William Delwiche, investment strategist at Baird Research & Insights.
"A lot of those cash investors are looking for a return," said Karen Dynan, vice president and co-director of economic studies at the Brookings Institute. "If a lot of people think home prices will rise, they will put money into the market, and that increases demand and pushes up prices."
Cash-buying can be good for the economy, providing it with a short-term boost. It "helps to bid up asset values for houses, and is good for homeowners who already own houses," Delwiche said. "There is also a benefit to state and local government finances because of the taxes associated with these purchases."
The Seahawks have returned to Renton, but not all of them as Danny O'Neil explains
Boeing CEO Jim McNerney apologizes for 'cowering employees' comment
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.