By DON FENLEY
Buyers have backed off cash sales so far this year. In January, they accounted for 28.9 percent of all sales. They picked up to 31.6 percent in February which is the bottom range for last year’s annual average.
There’re ample opinions about why this is happening at the threshold of the spring buying and selling season, but the truth of the matter is even the best economists’ crystal balls are looking like snow globes these days.
Almost one in four of the cash sales came with discounts from properties with an asking price of $400,000 or more. That share is skewed by a $145,000 discount on a $3.9 million sale in Butler. Without it, the average discount was $34,169.
Most of last month’s cash sales (43.8 percent) were for properties priced at $200,000 or less. The average was $11,800.
The median price for all properties with cash sales was $190,000.
As expected, most of the cash deals came in the largest markets. The most (12) were in Johnson City, followed by 10 in Kingsport. But that wasn’t a hard-fast rule. There were five cash sales in Church Hill representing 26 percent of all that community’s total February sales.
The market share of single-family existing cash deals was at its high points in 2011, 2012, and 2013. At that time, all-cash deals accounted for more than half of all sales.
Despite a persistent opinion that new residents flush with cash from the sale of their previous homes in higher-priced markets driving up local prices with over-market price cash offers, there’s no data to back it up. There were and will probably continue to be more examples of things like that, but they are anecdotes, and the plural of anecdote is not data. That doesn’t mean new residents have not pushed prices up because they are willing to pay more than what is considered by some to be the local market price.
It is likely that flippers accounted for a lion’s sales of cash sales.
Last year there were 232 flip sales in the Johnson City metro area. The average purchase price of those properties was $128,000 and 62 percent of them were all-cash deals.
There were 444 home purchases bought by flippers last year in the Kingsport-Bristol metro area at an average price of $104,000 and 64 percent were cash deals.
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