Crystal Coast: Cash Sales and the Housing “Friction Point”.
Cash Sales and the Housing “Friction Point”.
How & Why Crystal Coast Homes Are Being Purchased.
By: Bill Hitchcock
Crystal Coast Real Estate Television
It has happened again. Cash sales have sky-rocketed over the past 30 days. Year in, year out cash sales usually average between 13-15% of all residential home purchased. In late spring/early summer of 2008 we saw a couple of 30 day periods where cash purchases were as high as 24% of all transactions!
From July 27 to August 27 a total of 21% of all residential home purchased in the Crystal Coast MLS were cash.
What does this mean? Well, for starters-It is evident that cash in hand is not a problem for a lot of buyers. Secondly-It shows a decision not to borrow money. Sometimes it makes economic sense for the buyer to borrow funds even though they are capable of purchasing properties out-right.
It also just may be an indication of the economy as a whole. After-all, how bad can it be if this many folks can pay cash for their real estate purchases right?
The average sold price for a residential property for the past 30 days has been $224K. That is 16% lower than the same time period last year and 12% less than the year to date average.
Home sales are price point driven, not necessarily bargain driven.
The “Friction Point” is an automotive term used to describe the exact moment the engine engages/disengages when depressing the clutch. In my opinion the Crystal Coast housing market has just reached passed by its own friction point and engaged the real estate engine.
70% of all sales during the past 30 days have been at $249K and under. And guess what? 70% of all sales for the year have been from $249K and under.
The residential property friction point is $249K. The more homes that are priced at or beneath it the more sales that will occur.
Could the worst really be over?
Last week I wrote an article titled, “Crystal Coast Real Estate; Is the Worst Over”. In it I described signs of improvement and stabilization of the Crystal Coast real estate market. Signs that I had not seen since the market started its decline in 2006.
Yesterday I receive an e-mail from Realtor Magazine, the magazine of the National Association of Realtors. In it was a Wall Street Journal article titled, “Is the Worst Over?” This article describes nationally what I had noted and reported on locally almost two weeks prior.
I bring all of this up for one reason-To highlight the fact that the improvements of the Crystal Coast Real estate market are for real and not necessarily a fluke. And that quite possibly-The worst really is behind us.