Market Stat Monday: How Many Buyers Actually Pay Cash vs Financing?

Photo by Lucas Lechuga.

In the not-too-distant past, our real estate market was in a state of financing drought. Even if a buyer was prequalified, the chances of a mortgage making it out of underwriting with a clear to close were slim to none. Listing agents would many times refuse to show their listings to buyers who intended to use financing because the likelihood of the deal going through was so slim. This was during the recovery of the 2008 market crisis, and we have come a long way.

Banks have since loosened their purse strings and relaxed their underwriting guidelines, leaving more opportunity for the mortgaged masses… but how much of our current market do they make up? We took a look at all of the 772 resales that happened during the first half of 2017 in Brickell, Downtown, Midtown and Edgewater and found that financed purchases comprise about half of the transactions and sales volume. Check out this interactive graph that displays our findings.

Aside from the number of transactions and sales volume, we also found that only 14 of the 397 cash transactions were valued at over $1 million, and 23 of the 365 financed transactions were valued over $1 million. Naturally, none of the FHA financed transactions hit the benchmark since these loan limits are capped far below.

Are you surprised by any of these findings? How do you think the trend will continue through the rest of the year and into 2018?