In Southern California’s competitive real estate market, stories of cash offers abound. But new figures show cash sales in the region are dropping.
Cash sales make up about 25 percent of real estate transactions in Southern California, compared to 34 percent nationally, according to real estate data firm CoreLogic. The share of cash sales in the region has been dropping since the end of the recession.
CoreLogic analyst Andrew LePage said investors, who often pay in cash, are not buying up homes as often as they did during the mortgage crisis. Home prices have rebounded faster than in other parts of the country, translating into diminished margins for investors.
"Cash was used for a relatively high percentage of the distressed purchases properties," LePage said. "There’s just fewer distressed properties."
Arto Poladian, a Redfin agent in the San Fernando Valley, said that fewer cash buyers in the market is good news for traditional homebuyers who need a mortgage.
“There’s the ease of acceptance of the cash offer, a quicker close,” Poladian said. “Less cash buyers in the mix makes it more attractive for my (buyer) clients.”
But some brokers say they’re still seeing plenty of cash offers in the most sought-after neighborhoods. Rick Barnes, who sells homes in Glendale and La Cañada Flintridge said all-cash bids are coming in from international homebuyers, and others.
"It’s not just Middle-Easterners. And it’s not just Asians," Barnes said. "People come in, their parents have cash, and they’re buying in cash."