[quote=earlyretirement]I don’t know the exact percentages, but BG is correct that MANY of the deals going down now here locally and also in many other cities are cash buyers. Even in my neck of the woods I’ve met a few cash buyers. They are out there….[/quote]
It doesn’t matter whether these cash buyers paid ~$265K back in 2009-2011 in my area (these same ~1200 sf houses are now $385K+) and shut out an FHA buyer or paid $1,265K in ER’s area (and shut out a buyer using a jumbo conv mtg for the bulk of their PM), the result is the same. The buyers using mortgages for PM in these areas lost out to an all-cash buyer.
For instance, in my micro-area, I know of three recent cash buyers from AZ, all “boomers.” They’re all graduates of Hilltop and Chula Vista High and have relatives in the immediate area (we are in the Hilltop HS attendance area but many who grew up here attended CVHS back in the day) :=]
These houses are fully furnished but vacant and have weekly gardeners. The buyers’ relatives occasionally walk over there to check the alarm system and exterior lights, change light bulbs if necessary and wash windows. These new buyers haven’t moved in yet because they’re still working in AZ. But they knew what a good deal was on a well-built house in their “home turf” with a big backyard when their relatives told them about it. I’ve seen one of these owner-couples come for a week to “escape the heat” last summer but I don’t pay too close attention to when they all “visit.”
They didn’t quibble over antiquated wall heaters and stuck windows because all but one of these houses were REO’s. These buyers were decisive and placed an immediate all-cash offer before the sign went up in the yard (it is customary for local agents around here with a new listing to poll the neighbors for buyer-referrals before placing the property on the MLS). Another neighbor bought a similar residence with all cash for their daughter and grandkids to live in.
A second subset of absentee homeowners/buyers we have around here which I have posted about here before are Mexican Nationals, mostly residing in Guadalajara and Mexico City. However they prefer the over-2500 sf ranch with a 1/2+ AC lot with pool and even tennis court and obviously cannot get a US mortgage. There are at least a DOZEN of these properties around here (that I know of) which are fully furnished and vacant and have been for years. Gardeners and a pool service visit once per week and sometimes handymen and pest control companies. Only once have I seen a family with kids splashing off the pool slide and jumping off the diving board but this property isn’t on my regular walking route.
Hundreds, of not thousands of Mexican Nationals could afford in the past and can afford today to buy a SFR in SD County and leave it vacant for their family’s occasional enjoyment. Most of these homes have been owned free-and clear for many years and no, they didn’t buy them with “drug money.” They are “old money” and some of them are no doubt executives.
I’m sure there are same or similarly-owned properties in ER’s HOA.
A third subset of absentee owners we have around here are not buyers but senior citizens who have a lot of “stuff.” They left their SFR in Chula Vista crammed full of “stuff” and moved into a retirement home, a smaller home in the country/mtns (Santa Ysabel, Julian, Big Bear, etc), or a child’s home and either can’t make a decision to sell their ChulaV home, can’t part with their “stuff” in it and/or wish to leave the home to their children. Some of these homes (a few on my walking route) have been “vacant” for ten years or more. These properties tend to be unkempt until they get a weed abatement and trash (pennysavers and junk mail) notice/fine from the City. Then and only then do the owners hire a one-time gardener until such time as the next weed-abatement notice is sent. (If owners don’t respond to the notice, the City sends a cleanup crew to the property and then places a lien against it.)
I have actually contacted two of the above owners for a friend who offered to clean them out for the owner and transport their stuff to wherever they wanted if they would sell him their property for all cash so he could flip it. Both owners (one free and clear and one owing $32K) adamantly refused to sell.
In all three instances, the result for today’s buyers is the same. The homes are 90-100% unused (some for many years), are situated in nice neighborhoods (even “luxury” areas), aren’t or were never were “in distress” but have been and are “off the market” for the foreseeable future.
SD County is an attractive spot for vacation homes for people all over the world.
