Cash buyers make up almost a third of U.S. home purchases
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Re: Cash buyers make up almost a third of U.S. home purchases
#2No post body was provided.
Re: Cash buyers make up almost a third of U.S. home purchases
#3Since this confused me: cash buyer in relation to housing is someone paying the full amount without using a mortgage. They are probably using checks or wire transfers instead of metal briefcases filled with $100 bills.
Re: Cash buyers make up almost a third of U.S. home purchases
#4Since this confused me: cash buyer in relation to housing is someone paying the full amount without using a mortgage. They are probably using checks or wire transfers instead of metal briefcases filled with $100 bills.
It’s a proxy for non wage earner real estate purchases. Either investments or buyers coming with all cash from equity of any sort (previous real estate holdings, securities, etc).
It’s important because it distorts local markets where wage earners who need a mortgage and are governed by a monthly payment are competing with these market participants.
Re: Cash buyers make up almost a third of U.S. home purchases
#5> Why are there so many cash buyers
Simple, investors discovered that purchasing homes in a market limiting new construction, they can change what ever rent they want. That provides a larger return than what the markets provide.
The only way out of this is if an entity owns say over 5 homes for rental income, property taxes should be increased on these homes to say 100% of value per year. It doubles with each 10 homes owned.
Re: Cash buyers make up almost a third of U.S. home purchases
#6Since this confused me: cash buyer in relation to housing is someone paying the full amount without using a mortgage. They are probably using checks or wire transfers instead of metal briefcases filled with $100 bills.
It’s a proxy for non wage earner real estate purchases. Either investments or buyers coming with all cash from equity of any sort (previous real estate holdings, securities, etc). It’s important because it distorts local markets where wage earners who need a mortgage and are governed by a monthly payment are competing with these market participants.
Maybe. But some are homeowners who sold a property and use the proceeds to pay for another one, in which case there's not much change in net demand. This surely beats their taking out a low interest loan to speculate on an investment property.
Re: Cash buyers make up almost a third of U.S. home purchases
#7Since this confused me: cash buyer in relation to housing is someone paying the full amount without using a mortgage. They are probably using checks or wire transfers instead of metal briefcases filled with $100 bills.
Or, taking a securities backed line of credit against personal investments. Making the purchase promptly, then mortgaging afterwards
Re: Cash buyers make up almost a third of U.S. home purchases
#8Earlier quoted context omitted.
It’s a proxy for non wage earner real estate purchases. Either investments or buyers coming with all cash from equity of any sort (previous real estate holdings, securities, etc). It’s important because it distorts local markets where wage earners who need a mortgage and are governed by a monthly payment are competing with these market participants.
Maybe. But some are homeowners who sold a property and use the proceeds to pay for another one, in which case there's not much change in net demand. This surely beats their taking out a low interest loan to speculate on an investment property.
> But some are homeowners who sold a property and use the proceeds to pay for another one, in which case there's not much change in net demand.
That's not a cash offer unless the property being purchased is far lower in purchase price than the profit off the sale of the first home (i.e. due to downsizing, or moving from a much higher to much lower cost area), in which case it is a different housing submarket, and there could be a net local demand increase.
Re: Cash buyers make up almost a third of U.S. home purchases
#9Since this confused me: cash buyer in relation to housing is someone paying the full amount without using a mortgage. They are probably using checks or wire transfers instead of metal briefcases filled with $100 bills.
In Australia actual suitcases of cash are allowed and sometimes used for buying houses because Lawyers, Realtors, and Accountants have zero accountability to report anything suspicious to anyone.
"Anti Money Laundering" laws to stop that happening never managed to actually be passed into legislation in Australia [0] despite many "attempts" since 2006 (the politicians forming discussion groups of committees for re-reviewing the potential idea of AML every few years then seemingly deciding it's too scary to be labelled as the cohort who stopped the vast money laundering into property in Australia).
KYC only exists for banks here, and we are near the bottom of the barrel when it comes to money laundering compliance [1] (Australia is one of only 8% of countries assessed by the FATF’s 4th Mutual Evaluation process as being totally non-compliant)
A suitcase of cash buys a criminal the choicest realestate plus a chain of anonymous Australian shell companies controlled by Panamian or Cayman Islands companies.
The actual beneficial owner of the property can rarely be determined in these cases.
Or even worse, they leverage their crime proceeds and get fat bank loans. Our largest bank was in on it too, they've been caught so many times [1]
A new book [2] titled "The Lucky Laundry, How the Aussie Economy Got Hooked on the World’s Dirtiest Cash" was recently published about Australia's wilful ignorance in turning a blind eye to crime because of greed and rampant capital appreciation (many yearly house price rises are greater than the owner's annual gross salary/wage before tax)
[0] https://www.macrobusiness.com.au/2021/09/australian-property...
[1] https://michaelwest.com.au/do-not-stuff-up-this-institution-...
[2] https://michaelwest.com.au/lucky-laundry-review-aml-australi...
Re: Cash buyers make up almost a third of U.S. home purchases
#10Earlier quoted context omitted.
It’s a proxy for non wage earner real estate purchases. Either investments or buyers coming with all cash from equity of any sort (previous real estate holdings, securities, etc). It’s important because it distorts local markets where wage earners who need a mortgage and are governed by a monthly payment are competing with these market participants.
Maybe. But some are homeowners who sold a property and use the proceeds to pay for another one, in which case there's not much change in net demand. This surely beats their taking out a low interest loan to speculate on an investment property.
That’s a possible explanation: people who hold title without encumbrance on their home are moving more often.
Another possible explanation is that there are more people/entities with large amounts of cash, or less people with enough income to buy a house, or both.
Or maybe all three.