Full disclosure: The Tim is employed by Redfin.
As promised, I posted my all-cash buyer analysis to Redfin’s Seattle blog yesterday: 38% of Sales in King County Were Purchased With Cash in 2011
Here’s the chart from the post, with an added histogram based on your comments here earlier this week. Select which type of financing you want to view on the heat map or histogram (zero down, 20%+, or all cash), then drag the “Heat Map Year” control to view a zip code heat map for any year. Zip codes where less than 15% of the sales for that year were of the selected financing type are colored in blue shades on the map, while above 15% will show up in shades of red. Float your mouse pointer over a zip code or a point in the chart below to get the details for your selected year.
The viz takes a little while to load, but it’s worth it (in my opinion).
What I find really interesting about this chart is how closely the sales volume line (brown) and the zero down line (orange) trend to each other over the years. Meanwhile, as the bottom fell out of zero down purchases, the number of all cash sales has been soaring, up from just 12% of the market in 2006 to 38% in 2011. So far 2012 is following the same trend, as well.
What’s driving the big boost in all cash financing? My theory is that it’s a combination of investors taking advantage of low prices and increasing rents and purchases by well-paid tech workers as various cash-flush companies (Amazon, Microsoft, Google, Facebook, etc.) continue to ramp up their hiring.
All cash deals appear to be dominating the low end, making up over 50% of sales in the $100,000 to $199,999 range in 2011. Whether we’re “at the bottom” or not, it definitely looks like there are a non-trivial number of cash investors who feel like it’s a good time to buy up some cheap rentals…