Tri-Cities cash home sales continue at brisk pace in Q3


By DON FENLEY

Tri-Cities cash single-family home sales continued at a healthy clip in Q3. RealtyTrac’s Q3 Institutional and Cash Sales Report shows the share of those sales higher than the national share in all but Washington Co. TN where it was 0.07 lower. The national share was 33.9%.

Institution investors bought fewer homes in the Tri-Cities everywhere except Greene County. During Q3 they accounted for 5.7% of single-family home sales, compared to 4.3% nationwide.

When compared to Q3 last year, cash sales were up in five local counties and down two. But those ups and down were not big share swings.

COUNTY 2014 Q3 2013 Q3 2014 Q2
Carter 45.1% 33.3% 50.0%
Greene 46.5% 50.4% 52.6%
Hawkins 41.7% 33.7% 36.8%
Johnson 50.0% 54.2% 62.2%
Sullivan 39.4% 35.0% 31.2%
Unicoi 55.2% 54.4% 47.5%
Washington TN 33.2% 32.3% 33.7%

Local prices have not performed as well as the national number cited by Blomquist. According to the Northeast Tennessee Association of Realtors Trends Report the average sales price has increased 12.2% in the 11-county region during the past three years.“Cash sales continue to be an important piece of the real estate puzzle right now, representing one in every three home sales nationwide in the third quarter of 2014 and helping to drive up U.S. median home prices 38 percent over the last two and half years,” said Daren Blomquist, vice president at RealtyTrac. “As institutional investors and other cash buyers slow down their purchasing in many markets across the country, more traditional buyers — including first-time homebuyers and move-up buyers — will need to increasingly fill in the missing puzzle pieces to maintain the momentum of the housing recovery.

“Institutional investors are still actively purchasing single family rentals, but continue to gravitate toward markets where lower-end inventory is still available,” Blomquist continued. “Meanwhile there has been a recent surge in cash buyers in some markets, often coinciding with either a rebound in distressed sales attracting bargain-hunting cash buyers or a booming job market engendering a competitive bidding environment where cash is king.”

This is how local institutional home sales are tracking:

COUNTY 2014 Q3 2013 Q3 2014 Q2
Carter 0.0% 0.8% 1.0%
Greene 5.7% 2.8% 3.6%
Hawkins 2.4% 2.2% 3.5%
Johnson 0.0% 3.4% 0.0%
Sullivan 1.0% 2.5% 3.3%
Unicoi 0.0% 1.8% 0.0%
Washington TN 1.0% 0.8% 1.6%

 

Cash sales account for larger share of very high-end, low-end and distressed sales

 Cash sales in the third quarter skewed higher on both ends of the home price spectrum. Cash sales accounted for 64 percent of purchases of homes selling for $100,000 or less, and cash sales accounted for 41 percent of purchases of homes selling for more than $2 million.

Cash sales represented a larger share of distressed sales, accounting for 54.6 percent of distressed sales — sales of homes in the foreclosure process or bank-owned.

RealtyTrac’s report shows a total sales share but does not break out the number of high-end or low-end sales.

Report methodology

 The RealtyTrac U.S. Institutional Investor & Cash Sales Report is derived from recorded sales deeds and loan data. Statistics for previous quarters are revised when each new quarterly report is issued as more deed data becomes available for those previous months.

Definitions

 All-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.

Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in the last 12 months.

 

NAT. STATE 2014 Q3 2013 Q3 2014 Q2
U.S. Total 33.9% 36.9% 33.9%
Tennessee 36.4% 35.7% 36.4%

 

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