The portion of all-cash home sales in the District of Columbia is on the rise, with outside buyers and heightened competition driving the increase. According to data from RealtyTrac, a real estate information company, and online marketplace for foreclosed and defaulted properties, 24.3% of last year’s home sales in the district were all cash deals. That is the highest percentage in over ten years.
Daren Blomquist, VP of RealtyTrac, explains that a location like the District of Columbia attracts buyers from the outside, who are often wealthy, not constrained by local market conditions, and can pay in cash to beat out competition.
The condo-townhouse market saw a higher prevalence of all-cash deals, making up 26% of all transactions last year. Institutional and corporate buyers were the most active all-cash condo purchasers. Leading the way in all-cash condo purchases was BDC Skyhouse East LLC at 240 followed by Another LLC with 18 and Cartus Financial with 14. In the single-family housing market, cash deals made up 18% of all transactions.
Interestingly, Blomquist notes that November saw a sizeable jump in cash deals in the district, accounting for 41% of all home transactions. He attributes the spike to the implementation of newly passed TRID rules.
DC metro area all-cash sales declining
In the Washington-Arlington-Alexandria metro area last year, cash sales accounted for a smaller percentage of all transactions at 20.3%. That percentage was the lowest in the metro area since 2008.
Both the metro area and district trailed the national average, with RealtyTrac finding 30.1% of all U.S. residential sales last year were all-cash deals. That fraction was the lowest nationwide since 2008.
Of markets with populations over 1 million, the highest share of all cash deals in home sales belong to Miami (55.2%), Tampa (48.5%), Orlando (44.5%), Memphis (44.2), and Jacksonville (42.4%).
DC purchase loan trends
In its Q4 2015 U.S. Residential Property Loan Origination Report, RealtyTrac found 1.6 million loans were created for residential properties, up 1% from the fourth quarter of 2014 but down 14% over the third quarter of 2015.
Blomquist again named TRID regulations as one reason for the decrease, but also pointed out that weaknesses in some local economies, including oil-producing markets like Houston and Oklahoma City, could also be contributing. All 65 metro areas with at least 5,000 loan originations posted fourth quarter declines. In the DC metro area, 4Q 2015 saw 16,608 purchase loan originations, up 2.2% over 4Q 2014.
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