Are Cash Sales "Creating a Dangerous Mirage"? Not in the DMV

Posted on December 03, 2013 by Corey Hart
03

Dec

2013

A DSNews.com post - Are Cash Sales Creating a Dangerous Mirage? - covering the latest RealtyTrac report has been making its way around the Twitterverse today, with an ominous opening paragraph:

"Home prices and home sales have been rising over the past few years, pointing to a recovery in the housing market, but RealtyTrac warns that what we are seeing may not be a true recovery but instead a mirage created by investors—a dangerous mirage that could lead to trouble in the years to come."

According to the report, cash purchases made up nearly half of home sales across the nation in September. So we took a look at our local data to see how we compare to the national rate reported by RealtyTrac.  Fortunately the investor boogeymen artificially propping up prices doesn't appear to be "creating an unsustainable housing bubble" locally.  

So far this year in Baltimore Metro, DC Metro and Northern Virginia, cash sales have accounted for 22.5, 17.6, and 11.9 percent of sales, respectively. The peak year for cash purchases was 2011 for each region, but even then we weren't seeing anywhere near the 50% levels reported in other housing markets.

No, the price appreciation in the DMV appears to be the product of old fashioned low-supply-high-demand dynamics (coupled with low interest rates and a strong job market). 

If you're interested in seeing year-to-date cash-only purchase volume for your ZIP code or county, sign up for rbiEXPERT and access the Detailed report for any location. Do it soon as we're running our end-of-year promo for the rbiEXPERT annual plan

Baltimore Metro Area, DC Metro Area, market analysis
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