Cash is king in real estate market

BILOXI, MS (WLOX) - By David Elliott – bio | email

BILOXI, MS (WLOX) - The national recession and the depressed housing market have produced some stunning trends in the real estate market.

Real Estate Broker Ray Gonzales compiles regular reports for the National Association of Realtors. He has noticed one startling statistic regarding the Mississippi Gulf Coast Market.

"More than 32 percent of all sales were in cash," Gonzales said. "That's an incredible number. It's the highest cash percentage I've seen since I got into real estate in 1979. Typically that number is between three and six percent."

Gonzales said two groups of buyers are fueling the cash purchase numbers.

"First of all, investors. They're taking advantage of foreclosures and short sales. Then I would say retirees, who are coming down here and paying cash because they don't want a note on their final home."

Those foreclosures are driving down prices. Individual investors and groups are coming into this market with cash, looking for bargains.

Gonzales opened a folder containing information about a recent closing.

"This is a HUD repossession bought by an investor. It's a $100,000 house bought for $17,000."

Home prices are down 10.3 percent from 2009. And 72 percent of homes have sold for less than $160,000 from January first through September 30th. Forty percent have sold for less than $100,000.

Gonzales said it's not good news for sellers.

"Anybody who is on the market is being hurt by this. They will probably be hurt for the next two to six months, possibly."

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