Local News

Cash on the barrelhead Most homes in Highlands, Florida selling for cash

SEBRING - Private equity firms and institutional buyers have been snapping up low-price homes in Florida, and 66 percent of buyers are paying cash. That's according to RealtyTrac, a real estate research company. It's happening in Highlands County too. Clerk of Courts Bob Germaine pulled 3,547 deeds filed from Jan. 1 through Aug. 31 and found only 1,657 - about 53 percent - don't have mortgages.
Using the county Multilisting service, Steve Fruit came up with similar numbers: since Jan. 1, 1,279 condos, villas and single family homes were sold. "Of those, our MLS shows 823 were cash," said Fruit, a broker associate with RE/MAX Realty Plus II in Lake Placid, "a whopping 64 percent." The number of cash sales is going up, Fruit said. In 2010, for instance, 50 percent of single family and 55 of all residential sales were cash. By 2013, the numbers were 59 percent for single family and 64 percent for all residential. RealtyTrac reported 57 percent cash sales in Florida in 2012 and 61 percent so far this year. "That's astounding," said RealtyTrac Vice President Darren Blomquist. Nationwide, only Nevada and Maine came close to the cash wave with 64 percent and 60 percent, respectively. "Loans are more difficult to get, and people sitting on cash have been snapping up property they perceive as bargains," Fruit said. At the same time, Florida prices are going up, said Chip Boring, a broker with RE/MAX REALTY Plus in Sebring. One factor tipping the scales in favor of cash buyers: tightening mortgage requirements following the easy-lending era that produced the 2007-09 recession, the South Florida Sun Sentinel reported. The most likely to pay cash: Brevard County, seven out of every 10 houses, and Miami, Fort Lauderdale and West Palm Beach, 69 percent. "The home-loan mortgage market has utterly dried up," Mark Soskin, an associate professor at University of Central Florida's business college told the Sentinel. The willing sellers are banks, in many cases. "The banks have an urgent need to get these bad loans off their books as soon as possible," Lex Levinrad, founder of Distressed Real Estate Institute in Deerfield Beach, told the South Florida Sun Sentinel. The newspaper named the Blackstone Group in New York and Waypoint Homes of California among the fund-buyers. The Orlando Sentinel reported the same on Aug. 29: "Investor groups, international buyers, landlords and those in the market for vacation homes are fueling a cash-only market that has virtually shut out entry-level homebuyers, who can't get approved for mortgages." Orlando's supply and number of days on the market has changed considerably, Boring said. "Less inventory, more demand, higher prices. Highlands County is showing some signs of the same increase in values, but to a lesser degree because we still have an ample supply of inventory and the amount of distressed properties that still remain on the market." A large percentage of cash buyers are speculators, Boring guessed. "But I am using only the transactions that I have participated in." gpinnell@highlandstoday.com 863-386-5828