Figures from the National Association of Realtors for May 2011 are in and buyers who paid for their properties in CASH accounted for 30 percent of existing homes sales.  Figures for buyers who bought brand new properties were not reported.

Cash buyers have provided some well deserved relief to the market over the last twelve months.   New regulations and plain nervousness by banking institutions have instilled fear into sellers and buyers minds as additional paperwork and bureaucratic hurdles often need to be overcome at the eleventh hour.  To avoid the added stress and aggravation of finance dependent buyers , sellers often agree to a healthy discounted sales price in exchange for a smooth closing.

So who are these cash buyers, what are they buying and where are they coming from?

The Who?

Cash buyers are coming out of the wood work as prices have stabilized and many smell a deal. Cash buyers are individuals or investor groups who have turned to purchasing real estate as an alternative to other sources like stocks, mutual funds or saving accounts where returns given the current global economic climate, are abysmal.

So What?

Cash buyers; small and large investors look to capitalize on a discounted purchase price of condominiums or single family homes.  The maintenance requirements (or lack thereof) for condominiums lead many to purchase these types of investments in droves.  In May 2011, according to the Naples Area Board of Realtors over 300 condominiums were sold to cash purchasers.  June 2011 showcased at least 250 condominium properties were sold to our cash buyer friends.  With such a flurry activity, volume levels have dropped and that sends a strong signal to gun shy sellers who may benefit from getting off on the fence by placing their properties on the market.  Likewise, as volume contracts and demand for these investments continues, we can expect prices to begin to stabilize for this segment of the market.  Finally.

From Where?

It’s no mystery that Naples attracts a large number of purchasers from the Midwest and Northeast.  Therefore we could safely assume that these folks already contribute to the cash buyer pot.  Though a recent report underscores the overwhelming interest from international buyers;

According to Trulia, in 2010 Europeans, Canadians and Brazilians sent nearly $ 13 billion on residential property in Florida.   Below are the top 5 cities listed in order based on demand from international buyers:

  1. Cape Coral
  2. Miami
  3. Fort Lauderdale
  4. Naples
  5. Fort Myers

There is no telling when the cash spout will run dry as real estate bargains are down to timing and perception.  Nevertheless the whispers of (withheld) shadow housing inventory by banks and pent up supply courtesy of nervous sellers allows us to speculate that this favorable market geared towards cash rich investors is plentiful in the short term.    Though just because a property is on the market at a low price does it mean that it’s a good investment or a dirty proposition?

For a detailed consultation identifying lucrative residential investments in today’s market in Naples, Florida contact us: enquiries@naplesmeridian


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