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Are Cash Buyers Exiting The Market?

Posted on July 8, 2015 by Ray Williams (NMLS #216267).

So many buyers who need financing have had challenges getting offers accepted. By now you know about the influx of cash buyers. National statistics would say that just about 25% of all buyers were cash buyers. Not in the traditional sense mind you. Most cash buyers are corporate entities such as; hedge funds, insurance companies, or foreign entities. The problem they create is they have no intention of living in the house. But boy can they write a quick check to close on the house.

As a seller, if you received a cash offer it sure would be tough to turn it down. However, with more and more homeowners in Denver seeing opportunity to sell we are seeing an uptick in move up buyers. Many of our past clients are looking to sell and move up. While others who put minimal down are refinancing to get rid of mortgage insurance. But as those move up buyers continue to list their homes we will see more homes for buyers to choose from. As this happens there will become more of an equilibrium between supply and demand. Now I am not talking about tomorrow. But we are expecting home prices to rise for the next handful of years at a steady pace. So put that together with rising rents, and buying will feel more affordable than in the past. Even with rising home prices.

While cash will always be king, we will see a tapering in all cash buyers. So this will help for those of us who need to borrow to buy.



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