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    How To Buy A Home In A Cash Buyer Market

    2 years agoReply
    Saving up enough money for a down payment on a home can feel like a moving target that is subject to the whims of your real estate market. For buyers in markets where cash plays a critical role, calculating how much to save for a home becomes even more difficult. In some markets, a traditional 20 percent down payment may still land you at the bottom of a long list, behind all-cash buyers. On the other hand, in markets where cash offers are absent, a hefty down payment may make you the seller’s first choice. Understanding the role of cash in your local market can help you decide how much to save for a down payment on your next home.

    To get started, let’s check out which markets have the most and least cash buyers, and how to be a competitive shopper in either environment.

    Top Cash Buyer Markets

    Buyers in the Midwest and Southeast, especially Florida, are most likely to compete against all-cash buyers. An analysis of the 51 largest metros in the United States revealed that the top 28 cash buyer markets are all located east of the Mississippi River. Out of the top 10 metros with the largest percentage of cash buyers in Q2 of 2015, eight are located in Florida. The other two top cash buyer metros are located in the Midwest: Cleveland and Detroit.

    In the number one market for cash buyers, Miami, an astounding 55 percent of home purchases were made in cash during Q2 of 2015. This figure is actually smaller than previous years, potentially indicating a slowdown in the overall number of cash deals in Miami despite how high the percentage remains.

    Dropping to number five on the list, Cleveland, 45 percent of homes were all-cash sales—a full 10 percent less than Miami but still a significant share of the total home sales. In Orlando, the tenth top cash buyer market, the percentage of cash buyers drops by only 1 percent. Homebuyers in most major Florida metros and some Midwest markets can expect that 44 percent or more of the home sales will go to cash buyers.

    Least Cash Buyer Markets
    Buyers hoping to avoid competing against cash offers should head west. While cash dominates real estate in large swaths of the Southeast and Midwest, it is largely absent west of the Mississippi. Nine of the 10 metros with the smallest percentage of cash home sales are located in the West. Only one East Coast market appears on the list: Worcester, MA, where 21 percent of home sales were cash deals.

    Three California markets that also appear on the list—San Diego, Ventura and San Francisco– boast 21 percent cash home sales. Colorado Springs only had 14 percent cash deals.

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