Redfin reports that in 2021, 30% of home purchases nationwide have been cash deals. A recent article in Housing Wire reported “Cash buyers are scooping up homes like mad.”
That number is even higher in South Florida. West Palm Beach tops the list – 52.6% of the metro area’s home sales in 2021 have been in cash. Redfin real estate agent Dina Blau, based in West Palm Beach, says that the area is no stranger to second-home buyers who put up cash, but this year that trend has skyrocketed as homeowners from the Northeast sold their properties and headed south with their pockets full of cash.
“Across the area, new younger families are making their lives here,” said Linda Olsson, Realtor, whose agents sell homes from Martin County to south Palm Beach County. “They’re looking for homes with lots of space and pools and they have cash.”
As the economy continues to rebound, Americans have been able to capitalize on stock market gains – over time the S&P 500 Index had gained 36 percent. In addition, many who stayed employed during the pandemic were able to save plenty of money by not spending on leisure activities and travel because of shutdowns and the need for social distancing. Plus, remote work has enabled those who had been living in pricier cities, because of their jobs, they have been able to relocate to less expensive areas where their dollar goes much farther.
In May, Miami just experienced its best real estate sales month in history, with cash deals representing 38.9% of Miami closed sales in May 2021, compared to 25.9% in May 2020. Condo sales notched even higher: 48.3% of all Miami condo sales were in cash.
As a result of all these factors, more buyers can make cash purchases these days. And while cash is beneficial to those buyers, it may make it more difficult for first-time or lower-income homebuyers to make a competitive offer in a market with so many cash offers on the table.