Cash Buyers Dominate Baltimore Real Estate Market
May 10th, 2011
In Baltimore, Maryland, more than half the homes sold in the last six months have been cash deals[1]. While some believe that this is not good for the city’s market, citing real estate investors as the source behind the “accelerated decline” of housing in the area when the housing bubble burst, most analysts see “more potential for positive results than negative,” and even compare the current trend to a “mirror image of sorts to the housing bubble.” Moody Analytics chief economist Mark Zandi calls the cash-investing trend as “part of the process of cleaning up the mess.” He goes on to say that “it indicates we’re nearer to the end of this cleanup [because] real cash is willing to put itself on the line in these markets.”
However, not everyone is happy about the new influx of cash buyers. Specifically, buyers reliant on conventional financing or even flexible financing are “wringing their hands” because lower cash offers often will be accepted over financed offers[2]. The solidity of a cash deal will often be viewed as a greater benefit to the seller than making more money on the property.
Would you take cash over conventional financing, even if it meant taking less money?
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[1] http://www.baltimoresun.com/business/real-estate/bs-bz-baltimore-real-estate-investing20110510,0,2793788.story
[2] http://rismedia.com/2011-05-08/when-a-mortgage-puts-a-home-buyer-at-a-disadvantage/
May 10th, 2011 at 8:45 AM
Yes
May 10th, 2011 at 12:56 PM
I can certainly see why some aren’t pleased by the cash buyers. I see that happening here where I live. But even the cash buyers can’t last because the market is still flushed with inventory from foreclosures. Houses all over the place are sitting vacant in bank hands. So I think prices have a lot further to go before more buyers enter the market.
May 11th, 2011 at 8:15 AM
I would take the highest offer that I could get, cash or financed. But…..I don’t have to sell, am not under water on any properties, and don’t HAVE to unload anything in a hurry.
A seller who takes ready cash, at a substantially lower price, is obviously ether a scared bank, with lots of garbage on the books, hoping to quickly rake in the next sucker because they know we are NOWHERE NEAR BOTTOM, or a desperate cash-strapped homeowner who HAS to sell, for whatever reason.