Cash buyers continue to make up the bulk of Southwest Florida’s residential real estate transactions.
Sales of single-family homes and condominiums using cash accounted for 67 percent of all transactions in Sarasota County in January, according to a new report from data provider RealtyTrac. That was up from 62 percent in December, and from 45 percent one year earlier.
Home and condo sales closed with cash totaled nearly 60 percent of all sales in Manatee County in January, down from 64 percent from the previous month but up from 35 percent over the year.
Buyers, meanwhile, paid cash for 88 percent of the residences sold in Charlotte County, up from 83 percent in December and more than triple the 24 percent rate one year earlier.
As well, Florida remained the cash-buying capital of the nation at 65.5 percent of all home sales, RealtyTrac noted. The U.S. average was 44 percent.
The influence of institutional investors — such as giant equity fund Blackstone Group of New York — appears to be waning across the region.
Institutional buyers — defined as entities purchasing at least 10 properties a year — accounted for just 1.2 percent of residential sales in Sarasota in January. That compares with nearly 4 percent in December and 6 percent one year earlier.
In Manatee, institutions bought 7.5 percent of all homes, down from 15.5 percent the prior month and by 11 percent for the year.
In Charlotte, they accounted for 19 percent of residential sales, lower than the 30 percent the month before but higher than the 15 percent over the year.
Seven percent of sales statewide were purchased by institutions. The U.S. rate was 5.2 percent, a decline from 8.2 percent for the year and the lowest level since March 2012.
“Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening,” said Daren Blomquist, vice president at RealtyTrac.
“It’s unlikely that this pullback in purchasing is weather-related, given that there were increases in the institutional investor share of purchases in colder-weather markets such as Denver and Cincinnati, even while many warmer-weather markets in Florida and Arizona saw substantial decreases in the share of institutional investors from a year ago,” he added.
Florida had three metro areas with the largest drops in institutional investor shares of purchases: Fort Myers-Cape Coral, 70 percent; Tampa, 48 percent; and Jacksonville, 21 percent.
RealtyTrac said it looks as if big investors have moved to other parts of the country, with major increases in Austin, Texas, Cincinnati, Denver and Raleigh, N.C.
Meanwhile, lenders seem to be relying less on short sales to get rid of their distressed properties. Short sales are transactions in which lenders agree to allow a home to sell for less than the value of the mortgage.
Those sales totaled 14 percent of all residential deals in Sarasota in January, down from 20 percent a year earlier.
Manatee reported a 14 percent rate of short sales, compared with 16 percent a year before. And short sales comprised 8 percent of transactions in Charlotte, compared with 14 percent a year ago.
Owners also may be shying away from short sales because a popular tax break on forgiven mortgage debt expired at the end of 2013. That deduction saved short sellers thousands of dollars in taxes.
Florida led the nation, though, with a 15 percent level of short sales. The U.S. rate was just 6 percent.
The median sales price of all residential properties — including regular and distressed sales — climbed region wide over the year.
Sarasota posted a 22 percent gain to $154,000, Manatee reported a 7 percent gain to $155,000, and Charlotte rose 6 percent to $115,500.
Florida’s median price was $135,000, up 15 percent for the year.
Sarasota Herald Tribune, May 2014
