How common are “all cash” transactions for Silicon Valley real estate right now? During the first couple of years after the downturn ended and the recovery cycle began, we had a large percentage of all cash buyers in Santa Clara County and nearby. In recent years, though, that ratio has been declining. Where are we now?
Some areas and some types of sales are more frequently all cash than others. Here are a few quick stats for the last 60 days (numbers from MLSListings, crunched by me – disclaimer on good intentions but no guarantee) for single family homes, townhouses, and condominiums (not included are multi-family homes, apartment buildings, mobile homes, farms / ranches etc.). Also, please note that this is for closed sales, not pending sales.
What percentage of sales are all cash?
- Santa Clara County: 12% all cash
- San Mateo County: 20% all cash
- Santa Cruz County: 18% all cash
Few areas in Santa Clara County
- San Jose (entire city): 10% all cash
- Los Gatos: 12% all cash
- Cupertino: 11%
- Milpitas: 4%
- Morgan Hill: 13%
- Campbell: 10%
All cash sales close escrow without a loan. In higher priced homes, some new owners will put financing on the property after close of escrow. Particularly in lower priced homes, though, these are investor buyers who will be renting out the property. This is often the case with the lower priced distressed properties in particular.
With the crazy new demands that keep coming at us from banks and new requirements being imposed on appraisers, now more than ever, cash is king. That doesn’t mean that the cash buyer will get a deep discount, but there will be a slight one in most cases and certainly preferential treatment that will create a great advantage in multiple offer situations.
Learn more about buying and selling Silicon Valley real estate with cash offers:
What’s My Silicon Valley Home Worth? Estimating the Probable Buyer’s Value (financing impacts market value)