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Cash buyers make up almost a third of U.S. home purchases

deseret.com

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Re: Cash buyers make up almost a third of U.S. home purchases

#21

Post by xboxnolifes »

foogazi wrote: post #17
jmclnx wrote: post #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 home…

> they can change what ever rent they want They can’t - rent prices are set by the market Also in a high interest risk free rate of return is more appealing Why buy a house that can break down, not rent when you can park it in a bank

> They can’t - rent prices are set by the market

Landlords are part of the market.

Re: Cash buyers make up almost a third of U.S. home purchases

#22

Post by olliej »

trident5000 wrote: post #11

I would be willing to bet special financing is distorting the numbers. There are companies that front borrowers cash to help them compete with real cash buyers.

For it to make up a third I’m guessing corporate/private equity purchases in which case I _think_ it is considered good practice to use borrowed money to finance asset purchases if the cost to borrow is lower than the expected return. But plenty of these corps have the cash - depending on where you’re buying houses can be cheap (I had a friend going to uni in Merced, ca and many of the houses there had a list price that was less than just the down payment on my home in oakland). But from a business point of view the average capital gain+rent would probably be above interest on the loan to support it.

Re: Cash buyers make up almost a third of U.S. home purchases

#23

Post by danans »

Noumenon72 wrote: post #12
danans wrote: post #8

Earlier quoted context omitted.

> 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 the…

If I understand correctly, what you're saying is that selling for $200k usually means you had $120k left on the mortgage, so you only get $80k and can't make a cash offer for a new $200k home.

> so you only get $80k and can't make a cash offer for a new $200k home.

Or if you are buying an $80k property with the proceeds, it is so different than the sold property - either much smaller or less desirable in some way - that you are buying in what is effectively a different market altogether.

Re: Cash buyers make up almost a third of U.S. home purchases

#24

Post by mmerlin »

homonculus1 wrote: post #16
mmerlin wrote: post #9

Earlier quoted context omitted.

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-rev…

That's good, people should be able to do that. If people want to exchange cash for items of value there should be nothing stopping them. Police should just investigate crimes and stop laying totalitarian dragnets and checkpoints for everything people do that in some cases might also be done by a criminal.

The problem is barely anyone with any authority will ever want to investigate anything because they don't want to stop their own personal profits of sales commissions, legal/accounting fees, and the never-ending "equity mate" debt capital redraw from the magic pudding of upwardly inflating property valuations for 20+ years with hardly a pause.

It it open slather anything goes.

Meth money buys a lot of houses.

Global embezzlers flee their defrauded victims and find safe havens in Australia.

Lots of people clip the ticket and the govt makes more tax money, so why rock the boat and ask why a 22 year old has $2 million in cash?

Let me set you up with a few shell companies for blind asset holdings then we will visit my friend the real-estate agent...

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