All cash purchases for homes in Los Angeles are at their highest level since 2011, according to an article by KPCC.
One out of three homes sold in California were paid for in cash, during Q1 of 2014. Some of the higher percentages of these cash sales are in wealthy communities such as Beverly Hills, Arcadia and San Marino. In Arcadia alone, nearly 60% of sales last quarter were all cash! , .
It is estimated that most of these cash buyers are investors, second-time homeowners and overseas buyers, according to RealtyTrac.
With home prices skyrocketing and investors buying everything they can, the average buyers are getting pushed out and unable to afford anything at all in Southern California. This tends to be consistent with the trend we’re seeing these days. We are also seeing quite a large number of investors advertising things like we buy houses CASH! They are beating out the average buyers in the homes that are anywhere near affordable for most of us. The problem is, that once they have bought them the do the bear minimum to make it look like they have been renovated and then sell them for at least 25% more than what they paid. This is basically stripping the market of affordable homes.
Housing prices in both Arcadia and San Marino have gone well beyond the “highs” of the housing-bubble era.
The truth of the matter is there’s still a large influx of foreign buyers coming in, and with a lot of cash. We’re seeing a good portion of these buyers coming from China, based on various sources of data.
Who knows for sure how long this trend will last. The number of cash buyers from China could change as the country’s economy evolves.
Authored by Mayra Villa | Realtor at Town Square | CalBRE# 01768462
Reach me at 1 (626) 590-6826 | [email protected]
