By Jennifer Susanne Sommers
Â Hi All, interesting article in Sun Sentintel TodayÂ
561.819/2958By S. Mitra Kalita, Dow Jones News Service Buyers in markets around the U.S. are snapping up homes in all-cash deals, betting that prices are at or near bottom and breathing life into some of the nation's most battered housing markets.
Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale
area last year, according to an analysis from real-estate portal Zillow.com. In the fourth quarter of 2006, they represented just 13 percent of deals. Meanwhile, downtown Miami prices rose 15 percent in 2010 from a year earlier, according to the Miami Downtown Development Authority.
Nationally, 28 percent of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14 percent in October 2008, when the trade group began tracking the measure.
Richard Stoker, a retired sales executive, recently plunked down cash for two condominiums in Miami Beach, and plans to close on one more in coming days. He loves the complex's ocean views, four swimming pools and activities such as yoga and Pilates.
But what also motivated the purchase, said the 73-year-old, was that "the prices were just irresistible. Florida's been hit pretty hard." To pay the $1.8 million, $1.2 million and $1 million prices on the condos, Stoker and his wife, Jane, cashed out of some financial investments and sold a Roy Lichtenstein painting and an Alexander Calder mobile.
Some of the cash purchases reflect a tight lending environment, where even people with good credit and ample down payments are sometimes turned away for conventional borrowing.
"The rates are great but the underwriting is brutal," said Henry Schlangen, an agent with real-estate firm Pacific Union International who buys and sells for clients, mainly in Napa Valley, Calif.
"They hang these people upside down and shake them till they see what falls out of their pockets. So people are buying with cash and maybe they'll 'refi' later."
Nationally, it isn't clear whether prices have bottomed. The Case-Shiller index of housing prices in 20 cities showed a steep decline in prices until 2009, when they appeared to bottom and began to trend upward. But in the second half of last year, prices began falling again. A Zillow index, meanwhile, never noted the uptick.
Since mid-October, Canyon Ranch in Miami Beach, the development Stoker bought into, has sold 35 units, with a third of the buyers from overseas and many others retiring from the Northeast.
The Stokers have a home in Potomac, Md., but spend most of the year in Florida. Richard Stoker doesn't plan to rent out any of his new properties, saying he and his wife will live in one with two dogs, his son might live in another and the third will house an older dog and guests
Dont Forget Homepath 3% down 3.5% Toward closing costs thru June 30th, market clearing and prices will rise!
Carl Ashton Mortgage Loan Originator NMLS MLO ID # 247293 E Mortgage Management, LLC 7601 N Federal Highway Boca Raton FL 33487 Phone: Direct:561-210-3000 Mobile: 239-580-9977 Fax: 866-630-4085