Rise of the Rentals

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34 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION the latest is the all-cash trend Moderating? Non-financed home sales remain high but seem to be ticking down. Z ipRealty released an analysis of all of its transactions from Janu- ary 2012 through Decem- ber 2013, concluding that nearly one of every four closed without financing. While still high, that share is an improvement from only a few years ago, says Lanny Baker, president and CEO of ZipRealty. "Nationwide, the percentage of all-cash real estate transactions reached a five-year high in 2010 at 27 percent, and the percentage of all-cash property sales has slowly declined or flattened every subse- quent year," Baker said. The company's analysis points to two major market forces that have pushed all-cash financing to such high levels: increased investor activity and historically low housing inventory levels. These factors may be most evident in markets like Las Vegas, which saw the greatest share of all-cash transactions in 2013 at 48 percent. Also seeing elevated percentages of all-cash sales last year were Orlando (43 percent), Chicago (33 percent), Richmond (32 percent), and Los Angeles (29 percent). "Investors that are backed by institutions have the financial wherewithal to write a check for a home, unlike some consumers right now," said Van Davis, president of brokerage operations for ZipRealty. "And these inves- tors are still active in quite a few metro areas across the country." Davis added that all-cash sales have created a headache for home shoppers in highly competitive markets, where sellers are increas- ingly seeking those kinds of offers. "Many agents have told us anecdotally that some buyers may arrange post-close financing, which do not show as financed deal on the contract for pur- chase," he said. All-cash sales have created a headache for home shoppers in highly competitive markets, where sellers are increasingly seeking those kinds of offers.

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