Cash Remains King in Miami and Coral Gables Real Estate

posted on July 19th, 2012 filed under: Real Estate Market Data

Since the real estate bubble burst, cash transactions — i.e., without mortgage loans — have accounted for an abnormally large share of home sales in Miami and Coral Gables.  But now that sales numbers have rebounded and prices have stabilized, has the number of cash transactions normalized as well?

Not really.

Miami and Coral Gables Real Estate -- Cash Deals -- Percent of All Transactions (2005 to 2012)

Although the share of cash purchases in Miami and Coral Gables has receded somewhat from the post-crash peak, they still represent a far greater share of home sales than they did before the crash.

In other words, an unusually small portion of single-family homes sold in Miami and Coral Gables are sold to traditional buyers who have a downpayment and borrow the rest.  This is troubling.  The possibility that prices have hit bottom would be more reliable if pricing were being set by the traditional, daisy-chain relationship of incomes to loan amounts to prices.

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posted by // This entry was posted on Thursday, July 19th, 2012 at 11:56 am and is filed under Real Estate Market Data. You can follow any responses to this entry through the RSS 2.0 feed.

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