There are quite a few buyers who can purchase $800K plus homes. According to recent real estate industry numbers:
1. 23.2% of sales between January and June 2010 were all cash sales.
2. 51% of all First Time Home Buyers put 21% or more down on their home purchase
3. 74% of repeat buyers put 21% or more down on their home purchase.
4. The mean down payment for First Time Home Buyers was 23.1%.
5. The mean down payment for repeat buyers was 37.3%.
So as you can see, many people have cash in a market like this. Some of the buyers I know or have worked with sold in 2007, put the proceeds from the sale in the bank and have been renting until now. Others liquidated the securities in their retirement accounts a couple years ago, have been sitting on cash and are now investing in real estate with those funds. Others have pooled money with family members to purchase.
The general public only hears about the doom and gloom, foreclosures, short sales, and struggling families. They don't hear that in some of the older, more established neighborhoods in So Cal 40% or more of the homes have NO mortgage and others have very small balances owed on mortgages taken over 20 years ago. They don't hear about the people who have been saving for 10 years waiting for reasonable housing prices to return. Not everyone got caught up in the crazy loan and refi craze of the first half of this decade. These more fiscally responsible people are the people who can buy this type of property today. Would that we could all learn from their example. Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty