Study: Cash Buyers Bought at 23% Discount

April 28, 2016

All-cash buyers of single-family homes and condos, on average, paid 23 percent less per square foot than other home buyers, shows RealtyTrac’s first quarter 2016 U.S. Cash & Institutional Investor Housing Market Report.

All-cash buyers of single-family homes and condos nationwide paid a median of $91 per square foot in the first quarter, according to the study.

“While large institutional investors and other cash buyers continue to shrink as a share of U.S. home sales, these buyers still typically beat out traditional buyers using financing — in some cases even when they submit a lower offer for a home,” says Daren Blomquist, senior vice president at RealtyTrac. “Additionally cash buyers are often willing to take on properties in poor condition that may not readily qualify for standard financing, another reason why cash purchases normally sell at a lower price per square foot.”


On the other hand, researchers found that cash buyers in 9 percent of local housing markets paid a premium price per square foot. The following markets are where cash buyers paid a premium for buyers:


  • Honolulu: 6.6% premium
  • Seattle: 5.2%
  • San Francisco: 4.8%
  • Naples, Fla.: 3.9%
  • San Diego: 2.5%


Source:  RealtyTrac