[quote=oooreallly][quote=FlyerInHi]SK, sometimes I write too fast and don’t think. Doing all of that on iPad and multitasking tasking also.
I was just surprised that CV had only 20% all cash compared to 30% for the region (I remember something about dataquick reporting that). But you gave a good explanation – prices are higher in CV and it’s harder for investors to make money on rentals.[/quote]
There might be another angle to it…People might throw in all cash offers to get the house. But during escrow, there’s nothing preventing them from trying to get a loan while in escrow (so long closing isn’t contingent on the loan). Afterall, at closing, no one cares where the money came from as long as it’s there. Of course the only people who can play this game are people with money to begin with.[/quote]
Flyer, I believe CV’s lower percentage of all-cash buyers than county buyers overall is due to other reasons as well. That is that the bulk of buyers in CV are “worker bees” seeking housing close to work centers, many of whom have children for whom they want to enroll in its good public schools. This particular subset of buyers (young and youngish families) aren’t typically cash buyers because they don’t yet have the resources.
Another HUGE subset of “all cash” buyers are “empty nesters” and vacation-home buyers who are retirees or soon-to-be-retirees (both American and foreign). Not only does this demographic often NOT want a mortgage going forward, they have the means to pay cash for a property and some cannot otherwise qualify for a mortgage by today’s lending standards. There are no other “redeeming qualities” to CV properties (nearly 100% on tract and a good portion situated on substandard lots) except proximity to work centers and good schools. I believe that “celebrities,” retirement-home buyers and vacation home buyers in SD County using all-cash for PM are looking for LOCATION if they can afford it. SIZE doesn’t matter as much. For example, if they can get a 1400 sf WWII box in Roseville (Pt Loma) situated less than a mile uphill from where their 34-ft cabin cruiser is slipped (which they brought down here from points north), that will be just fine. Coronado and LJ are also favored by this subset of buyers, even for condos. Many of the “retiree” buyers without a pile of money to spend for a house will pay cash nonetheless but want a house close to relatives or as close to the city or water (harbor incl) as they can afford. Many of these boomer-buyers live in the “flyover states” and actually grew up in SD. They will buy a home using all-cash in Chula Vista or Lemon Grove if that is where their family members live. This happened a LOT during 2009-2011, when these buyers’ friends and relatives “back home” in SD alerted them to nearby bargains in their old neighborhoods which had virtually “unheard of” asking prices at the time.
A fourth type of “all-cash” purchaser in SD County are those seeking land, with or without a house on it (more rare than the other types). These are usually local business owners seeking a place to park company vehicles and/or have horses. They often don’t care if utilities have not yet been brought to the property. They have the connections and know-how to bring utilities there and build/remodel a house for their families on the property. This type of buyer often grew up in the area they are seeking land in or within a few miles of it. If a house sits on the piece of land they buy, they often won’t occupy said house until it is refurbished to their liking and they will undertake this refurbishment themselves or contract all or part of it out themselves. Several areas of East and North County and a couple of areas of South County are VERY attractive to this subset of buyers, especially in those areas where relatively flat, useable lots still exist.
Unlike counties in some “flyover” states where the entire county is as flat as a pool table and all the same temperature, SD County offers diversity in geography, views and weather for everyone, which is attractive to many out-of-state buyers. Proximity to tech jobs or perceived “good schools” only matters to a small subset of buyers who are overwhelmingly youngish worker bees in certain occupations. There ARE many other types of buyers and RE markets out there where all-cash is frequently used for purchase money.
