Consumers who bought homes with cash had another record showing in San Diego County in May, the latest DataQuick numbers say.
The share of cash deals rose to 33.3 percent, breaking the previous peak of 33 percent set in April. They made up 26.5 percent of all sales a year ago. May’s percentage of cash buyers surpassed that of the Southern California region, which was 31.3 percent.
Those who buy homes with cash are mainly investors, said DataQuick analyst Andrew LePage, but there are other groups, too.
“It’s people who retire or are near retirement who want to sell big houses and buy smaller houses,” LePage said. “Or parents buying houses near universities, paying with cash…and then you’ve got wealthy people buying luxury properties in cash.”
Throughout Southern California, cash buyers paid a median of $232,500 in May, up from $225,000 in April and $220,000 in May 2011. The median price for all types of homes combined in San Diego County in May was $335,000.
I recall there was talk before about how people really don’t have money to buy houses, and that most people probably don’t have enough savings to put down a downpayment, etc…. I think some of us mentioned, don’t underestimate people’s purchasing ability or wealth…Maybe…Maybe some folks are just in better shape then we give them credit for. Well if the tribune is right, 1:3 purchases appear to be cash. ouch….
For every saver sitting on 100s of thousands of dollars, there are dozens of indebted suckers paying interest left and right, or even defaulting on some of their many loans (credit cards, car loans, student loans, upside-down mortgages, etc.). Savers need a place to park their cash, and knowing that higher inflation is coming in the next 5-15 years, RE is an attractive option.
Not just the possibility of inflation/currency problems, but the fact that the Fed has made it clear that savers will be punished at all costs.
Like they’ve said, you can’t live in a stock or bond. Might as well buy a house with the money that’s been sitting around earning near 0% for years on end.
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