Cash buyers of homes move to center stage
Cash may not yet be king among buyers of residential real estate in Washoe County, but it’s edging ever closer to the throne.
That’s a sign that investors are becoming increasingly active as prices continue their slide and make residential investments more attractive.
Cash buyers those who didn’t use any type of loan to buy a home accounted for 26.3 percent of the purchases of existing homes in Washoe County during May.
That compares with 11.5 percent three years earlier, according to figures compiled by the Reno Sparks Association of Realtors from Multiple Listing Service data.
Even within the past year, the percentage of sales that are all-cash has risen substantially. In May 2010, cash sales accounted for 18.4 percent of residential transactions.
The phenomenon is even more pronounced because the number of home-transactions in the region has been steadily increasing.
With 496 MLS sales reported in Washoe County during May, nearly 130 all-cash deals closed. With about 450 MLS sales in the same month a year ago, the 18.4 percent share of the market represented by cash transactions translates into about 80 all-cash sales.
Sherrie Cartinella, president of the association of Realtors, said last week that the combination of lower sale prices combined with some stability in residential rents means that investors see value in purchases of single-family homes.
“Things are penciling now, particularly if they don’t have any debt payments,” Cartinella said.
The median price of a single-family home sold in Washoe County was $149,700. That is down 4 percent from April, and it’s 15 percent below year-earlier numbers.
And because the return on a residential rental often beats the interest on a conservative savings vehicle, Cartinella said there’s evidence that money is flowing into northern Nevada residential real estate from other asset classes.
There’s some evidence, too, that out-of-town money is beginning to move into investment purchases of single-family homes in the region Cartinella said.
Cash buyers often look to move aggressively and close transactions quickly.
They also are discovering that a promise of a fast close may not be enough to win substantial price reductions from worried sellers, Cartinella said.
She said sellers who can wait long enough for a buyer to win approval from a mortgage lender often won’t give in to blandishments of a fast sale. After all, she noted, the seller gets cash when the deal closes, no matter whether the check is written by a mortgage company or a buyer with a healthy bank account.
After expanding to the North Valleys in 2018, Crystal Creek Logistics is looking to grow to a new home at least twice the size of its current 35,000 sq. ft. location; the expansion would create another 55 jobs, bringing its total local workforce to about 100 employees.