The share of all-cash home sales in the Upstate has risen while sales of foreclosures have declined.
According to RealtyTrac, an online source for housing data, 52 percent of all homes sold in the Greenville-Mauldin-Easley metropolitan area and statewide were all-cash purchases.
Of all Upstate homes sold in April, 5.2 percent were foreclosures, down from 8.8 percent of all sales in April 2013. Foreclosures were 5.9 percent of the homes sold across the state last month. A year ago, that was 15.3 percent.
Daren Blomquist, RealtyTrac vice president, said foreclosure activity in the Greenville area has been trending downward, with consecutive declines for the past six months.
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“The banks are repossessing fewer properties and that means that they have fewer to sell, which ties into the trend,” he said.
The trend — fewer foreclosure sales and more all-cash sales — is being seen nationwide.
Interest rates began ticking up in the middle of 2013. All-cash sales rose shortly thereafter, he said.
“I think it ties into the fact that not only is it harder to get financing than it was a few years ago because lending standards are tighter, but now interest rates have risen enough that it makes it tougher for homeowners who rely on financing to compete,” Blomquist said.
That tilts the playing field in favor of the cash buyer, he said.
Residential foreclosures nationwide accounted for 9.2 percent of all sales in April, down from 9.7 percent of all sales in March and down from 10 percent of all sales in April 2013, said RealtyTrac, an online housing data.
A record 42.7 percent of all U.S. residential property sales in the first quarter were all-cash purchases, up from 37.8 percent in the previous quarter and 19.1 percent in first quarter 2013.
The National Association of Realtors said distressed sales — foreclosures and short sales — accounted for 15 percent of April sales, down from 18 percent in April 2013.
All-cash purchases rose from 29 percent in 2012 to 31 percent in 2013 and 33 percent in the first quarter of 2014, the NAR said.
Ten percent of April sales were foreclosures, and 5 percent were short sales, the NAR said. Foreclosures sold for an average discount of 16 percent below market value in April, while short sales were discounted 10 percent.
RealtyTrac said 15 percent of all-cash purchases in the first quarter were in the foreclosure process, and 10 percent were bank-owned properties. Eleven percent of all-cash purchases in the first quarter were to institutional investors, investors buying at least 10 properties in a calendar year.
The cash buyers include not just large institutional investors who are buying properties for rentals, but also retirees who may be looking at Greenville for a retirement home or are downsizing, Blomquist said.
Lawrence Yun, NAR chief economist, said many foreign buyers pay cash as well, and “the five-year bull run of the stock market has also provided financial wherewithal among higher wealth households.”
The average sales price of an all-cash purchase in the first quarter was $207,668 — 13 percent below the average estimated full-market value of the properties that were purchased.