Cash is King…Where Are The Cash Buyers?

A home purchaser offering all cash almost always has an advantage over any traditional buyer when competing for the same house. A cash offer means the home purchaser does not need a mortgage loan or an appraisal to close, so there is less risk the deal will fall through and they have the ability to close quicker than a traditional buyer. While some sellers may appreciate a cash offer, in many cases, if a buyer with a solid pre-approval letter offers a higher price, sellers will typically take the higher priced offer.

For the past year, Reston has been a sellers market, with low inventory of homes. This has allowed home prices to continue to rise. Additionally, the Federal Reserve have kept the interest rates low. Even if one could purchase a home with all cash, why would one not finance it anyways if mortgage interest rates are so low? In todays market, with all the uncertainty in the economy due to COVID-19, has the behavior of cash buyers changed? Let’s find out!

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For this analysis, we looked at the homes that sold in the past 90 days, compared to the previous year. Cash buyers represented 11% of all sales and in the past 90 days, there was a total of 46 homes that sold for all cash, compared with 43 homes from the previous year. In general, there was not a substantial difference in the number of cash buyers, but there were changes in the buying preferences. Specifically more single family detached homes, at higher price points, over $600K were being purchased with cash.

CASH SALES:

CASH SALES MEDIAN DAYS ON MARKET:

CASH SALES SOLD PRICE RANGE DETACHED HOMES:

Overall the data reveals that there was a 2-fold increase in the number of cash buyers purchasing luxury homes and single family detached homes greater than $600K in the past 90 days compared to the previous year.

About Peggy Yee

Peggy Yee is a supervising broker at Frankly Realtors and is a local Top Producer. She has sold over $200 million in sales and was one of Northern Virginia Magazine's Top Realtors since 2015. She has been quoted in the Around Reston Magazine, Washington Post, Money Magazine, Consumer Reports, Zillow, Trulia and Realtor.com. Peggy is 100% committed to making your move the best experience possible! Don't just take our word...Click here to see what Peggy's past clients have to say about the experience working with her from Buyer and Seller Video Testimonials and you'll understand why she is one of the top real estate agents in Reston with dozens of 5 Star Zillow reviews. Click here for Zillow Reviews.

* Data Source: BrightMLS and SmartCharts. Information deemed reliable but not guaranteed.