A home in Georgetown that sold for all-cash late last year.
Cash sales nationwide have reached their highest level in over two years, according to a report released recently by real estate firm RealtyTrac, and the DC area played a part.
Nearly thirty percent (29.35%) of November home sales in the greater DC area were cash transactions, representing a 40.3 percent jump from October. While month-over-month comparisons tend to be less reliable as predictive measures, this leap may be indicative of a larger trend, as the year-over-year increase was 46.2 percent.
While cash sales increased notably in the region, the gains were much more substantial in other metropolitan areas: San Francisco (up 89 percent), Columbus, Ohio (up 73 percent), and Milwaukee (up 71 percent) all saw significant gains.
“The jump in cash sales is likely a knee-jerk reaction to the new documentation and disclosure rules for mortgages that took effect in October, making it even more difficult for buyers using financing to compete with cash buyers in the already competitive housing market,” RealtyTrac vice president Daren Blomquist said.
Other factors which may be impelling a rise in cash home purchases are global financial uncertainties and the Federal Reserve’s gradual boost of interest rates. Recent upheaval and uncertainty in the global economy has created volatility in the stock market, while also leading foreign investors to buy up American real estate, which tends to be more stable than international investments.
Meanwhile, many expected the recent rise in interest rates to push mortgage rates back up to a level that American buyers have not seen since the real estate market bottomed out in 2008. However, depressed stock and bond yields seem to have hobbled any significant rise in mortgage interest rates in the short-term.
This article originally published at http://dc.urbanturf.com/articles/blog/cash_home_sales_reach_highest_level_in_2_years/10747
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