Cash Purchases Jump to 40 Percent of all Sales in July as Sales Volume Drops in Fastest-Appreciating Markets

Sales Volume Up11 Percent from Year Ago Nationwide, Down in CA, AZ, NV,GA;
Short Sale Share of Sales IncreasesNationwide and in 33 States, REO SalesFlat

IRVINE, Calif. – Aug. 29, 2013– RealtyTrac® (www.realtytrac.com), thenation’s leading source for comprehensive housing data, today released its July2013 U.S. Residential & Foreclosure Sales Report, which shows that U.S.residential properties sold at an estimated annualized pace of 5.5 million inJuly 2013, up 4 percent from the previous month and up 11 percent from a yearago — the biggest annual increase in sales volume so far this year.

While sales volume continued to increase nationwide, eightstates posted annual decreases in total sales, including California (down 17percent), Arizona (down 11 percent), Nevada (down 7 percent), and Georgia (down2 percent). Those four states also posted the four biggest annual increases in medianhome prices in July: California (up 31 percent); Nevada (up 27 percent);Arizona (up 21 percent); and Georgia (up 20 percent).

Thenational median sales price was $174,500 in July, up 4 percent from theprevious month and up 6 percent from a year ago — the 16th consecutive monthwhere median home prices nationwide have increased annually after bottoming inMarch 2012. The median price of a distressed sale — in foreclosure or bankowned — was $120,000, up 1 percent from the previous month but down 1 percentfrom a year ago and 37 percent below the median sales price of a non-distressedresidential property.

“Low inventory of homes availablefor sale is proving to be a double-edged sword in many local housing marketsthat have bounced back quickly from the real estate slump,” said DarenBlomquist, vice president at RealtyTrac. “Home prices are accelerating rapidlyin these markets thanks to the combination of low supply and strong demand.However, counter to the national trend, sales volume in these markets is downeven as the percentage of cash sales rises, indicating there is still strongdemand but that buyers who need financing to purchase are increasingly left outin the cold.

“The recent uptick in interest rates could alsobe contributing to a higher percentage of cash purchases as some non-cashbuyers can no longer afford to buy, particularly in high-priced markets,”Blomquist added.

Other high-levelfindings from the report:

  • All-cash purchases nationwide accounted for 40 percent of all sales ofresidential property in July, up from 35 percent of all sales in June and upfrom 31 percent of all sales in July 2012. Among the nation’s 20 largest metroareas, those with the biggest month-over-month jumps in cash sales share wereDallas (up 82 percent), St. Louis (up 66 percent), Los Angeles (up 32 percent),Riverside-San Bernardino in Southern California (up 26 percent), Seattle (up 21percent), and Phoenix (up 21 percent).
  • Short sales (where thesale price is below the combined total of outstanding mortgages secured by theproperty) accounted for 14 percent of all residential sales in July, up from 13percent in June and up from 9 percent in July 2012. States with the highestpercentage of short sales in July included Nevada (35 percent), Florida (30percent), Maryland (20 percent), Washington (19 percent), and Tennessee (19percent).
  • Institutional investorpurchases (sales to non-lending entities that purchased at least 10 propertiesin the last 12 months) accounted for 9 percent of all residential sales inJuly, the same percentage as in the previous month and also the same percentageas in July 2012. Metro areas with the highest percentage of institutionalinvestor purchases included Atlanta (25 percent), Tampa (22 percent), Palm Bay,Fla., (20 percent), Greenville, S.C. (19 percent), and Charlotte, N.C. (19percent).
  • Sales ofbank-owned properties (REO) accounted for 9 percent of all residential sales inJuly, also the same percentage as the previous month and a year ago. Metroareas with the highest percentages of REO sales included Detroit (26 percent),Modesto, Calif. (25 percent), Stockton, Calif., (24 percent), Las Vegas (24percent), and Cleveland (20 percent).
  • Among 20 of thenation’s largest metro areas with annual sales estimates tracked in the report,the biggest year-over-year decreases in sales volume were in San Francisco(down 20 percent), Los Angeles (down 20 percent), San Diego (down 19 percent),Riverside-San Bernardino (down 14 percent), Phoenix (down 13 percent), andAtlanta (down 8 percent).
  • Among 20 of the nation’s largest metro areas with annual sales estimatestracked in the report, the biggest year-over-year increases in sales volumewere in Chicago (up 27 percent), Minneapolis (up 23 percent), Baltimore (up 21percent), Boston (up 20 percent), and Philadelphia (up 20percent).
  • Major metro areas wheremedian residential property prices increased 20 percent or more from a year agoin July included Los Angeles (up 29 percent), Atlanta (up 24 percent), SanFrancisco (up 35 percent), Riverside-San Bernardino (up 26 percent), andPhoenix (up 25 percent).

Local brokerperspectives
“The Northern Utah market is significantlystronger than last year with an increase in both sales volume and the number ofnew listings we have to offer,” said Steve Roney, CEO of PrudentialUtah Real Estate.  “Distressed sales have had a minimumimpact on our area as they have been overwhelmed by the return to healthymarket conditions.”

“California saw a decrease in salesduring the month of July because of the severely limited inventory that existedin April and May,” said Rich Cosner, President of PrudentialCalifornia Realty, covering Orange, Riverside and San Bernardinocounties in Southern California. “The overall pace of sales going intoescrow has remained steady as buyers are finding it easier to find a home, andinventory in many Southern California markets has doubled.”

“Theincrease in completed short sales in July is a result of the frenzied buyingpace during the first few months of the year when the seasonal activityincreased tremendously,” said Craig King, COO of ChaseInternational, covering the Reno and Lake Tahoe markets. “With almost 40 percent of homeowners in the Reno-Sparks area still underwateron their mortgages we should continue to see some short sales but overall thenumber of new short sales coming on the market is declining as we return to anormalizing market place and a return of equity sales.”

“TheNew York market has been increasing at a slow and steady rate simply becausethe New York market did not fall as hard as many other markets across thecountry,” said Emmett Laffey, CEO of Laffey FineHomes International, covering Long Island and the five boroughs ofNew York City. “Remember slow and steady wins therace.”

“Active residential property sale listings are down 16percent in the Tulsa and Oklahoma City markets,” said Sheldon Detrick CEO ofPrudentialDetrick/Prudential Alliance Realty, covering the Oklahoma City andTulsa markets.  “I don’t think Oklahoma has ever had a shortage ofinventory like it does today.”

Detrick added that increasingcash sales nationwide are a concern, especially given the adoption of theQualified Mortgage guidelines set to take effect Jan. 10 as part of theDodd-Frank Wall Street Reform and Consumer ProtectionAct.

“That is going to put more pressure on the lenders to bea lot more circumspect about who can qualify for a loan,” Detricksaid.  “It’s going to require 20 percent down on all loans and highercredit scores, and there are some estimates out there that possibly 25 percentto 43 percent of buyers will not be able to qualify for a loan after January10th.  Now that is scary.”

Reportmethodology
The RealtyTrac U.S. Residential SalesReport provides counts and median prices for sales of residential propertiesnationwide, by state and metropolitan statistical areas with a population of500,000 or more. Data is also available at the county level upon request. Thereport also provides a breakdown of cash sales, institutional investor sales,short sales and bank-owned sales. The data is derived from recorded sales deedsand loan data, which is used to determine cash sales and short sales. Salescounts for recent months are projected based on seasonality and expected numberof sales records for those months that are not yet available from public recordsources but will be in the future given historicalpatterns.

Definitions
Residentialproperty sales: sales of single family homes,condominiums/townhomes, and co-ops, not including multi-familyproperties.

Annualized sales: anannualized estimate of the number of residential property sales based on theactual number of sales deeds received for the month, accounting for expected salesrecords for that month that will be received in future months as well asseasonality.

Distressed sales: sale of aresidential property that is actively in the foreclosure process or bank-ownedwhen the sale is recorded.

Distressed discount:percentage difference between the median price of distressed salesand a non-distressed sales in a given geographicarea.

Bank-Owned sales: sales ofresidential properties that have been foreclosed on and are owned by theforeclosing lender (bank).

Short sales:sales of residential properties where the sale price is below the combinedtotal of outstanding mortgages secured by theproperty.

All-cash purchases: sales whereno loan is recorded at the time of sale and where RealtyTrac has coverage ofloan data.

Institutional investorpurchases: residential property sales to non-lending entities thatpurchased at least 10 properties in the last 12months.

ReportLicense                                                                               
The RealtyTrac U.S.Foreclosure Market Report is the result of a proprietary evaluation ofinformation compiled by RealtyTrac; the report and any of the information inwhole or in part can only be quoted, copied, published, re-published,distributed and/or re-distributed or used in any manner if the userspecifically references RealtyTrac as the source for said report and/or any ofthe information set forth within thereport.

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AboutRealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is theleading supplier of U.S. real estate data, with more than 1.5 million activedefault, foreclosureauction and bank-ownedproperties, and more than 1 million active for-sale listings on its website,which also provides essential housing information for more than 100 millionhomes nationwide. This information includes property characteristics, taxassessor records, bankruptcy status and sales history, along with 20 categoriesof key housing-related facts provided by RealtyTrac’s wholly-owned subsidiary, Homefacts®.RealtyTrac’s foreclosurereports and other housing data are relied on by the Federal Reserve,U.S. Treasury Department, HUD, numerous state housing and banking departments,investment funds as well as millions of real estate professionals andconsumers, to help evaluate housing trends and make informed decisions aboutreal estate.

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