May 23, 2024 - Business

All-cash home purchases gradually rise in the Triangle

Gimghoul neighborhood of Chapel Hill

Chapel Hill's Gimghoul neighborhood. Photo: Katie Peralta Soloff/Axios

The number of all-cash home sales in the Triangle has steadily risen in recent years, though it's below the national average.

Why it matters: Local real estate professionals say cash deals are popular amid high interest rates. Wealthy buyers can adapt to this pricey real estate market more easily than typical buyers needing a loan.

Between the lines: All-cash buyers also present several advantages to sellers, including their ability to close quickly and offer more due diligence money.

The big picture: Since January 2011, 34.5% of homes nationwide have been purchased with cash as of February 2024, per Redfin data.

By the numbers: Of the 44,769 total home sales in the Triangle between May 2023 and May 2024, 54% were conventional mortgages and 19% were cash, according to data from Triangle Multiple Listing Service. The remainder were mostly government-insured mortgage programs.

  • The 12 months prior to that, 19% were cash and 58% were conventional mortgages.

Yes, but: The overall percentage of cash sales across all price points in the Triangle over the past 18 months (beginning in January 2023) is about 18.2%, up from around 16.2% during the 18 months before the pandemic.

What they're saying: "As interest rates pushed 8% we saw a higher proportion of all-cash offers," says Adam Dickinson, a Realtor with Nest Realty.

State of play: All-cash buyers come from a range of backgrounds, Dickinson says. Often they're out-of-state buyers relocating from pricier markets.

  • "So they're not interest rate sensitive. Then you get the people who are relocating here for jobs," John Finan of Exeter Building Company told WTVD last year.
  • Plus, there are plenty of high-income residents in the Triangle whose homes have appreciated a lot — and who've been able to save money while mortgage rates were very low, Dickinson adds.

Lower-income buyers and first-time buyers are feeling the squeeze from the competitive edge presented by all-cash buyers.

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