A Stunning 63% Of Florida December Home Purchases Were "All Cash"

Tyler Durden's picture




 

Back in August, when we wrote that "A Stunning 60% Of All Home Purchases Are "Cash Only" - A 200% Jump In Five Years" based on Goldman data, many laughed, unable to fathom that the majority of the US housing market has become a flippers' game played by institutions and the uber wealthy, who don't need a stinking mortgage to buy that South Beach mansion. The implication of course being that housing is not effectively shut for that part of the population - the vast majority - that relies on credit to be able to purchase a home (a finding confirmed by the ongoing collapse in mortgage applications).

As it turns out we were just a little ahead of the curve as usual, and as real estate company RealtyTrac reported overnight, with data that naturally is delayed due to the delayed impact of houses coming out of the much delayed foreclosure pipeline, "All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from a revised 38.1 percent in November, and up from 18.0 percent in December 2012." That's a 10% increase in one month for a 6-9 month delayed series, which means that in reality, roughly about 60% of all homes are now purchased with cold, hard cash.

The chart below shows how in June and July the data finally started reflecting the Fed's September 2012 QEternity reality. As we said: 6-9 month lag.

Incidentally, broken down by states, this is already confirmed in places like Florida, Wisonsin and Alabama. From RealtyTrac:

States where all-cash sales accounted for more than 50 percent of all residential sales in December included:

  • Florida (62.5 percent),
  • Wisconsin (59.8 percent),
  • Alabama (55.7 percent),
  • South Carolina (51.3 percent),
  • Georgia (51.3 percent).

And rising fast.

At this pace the entire US housing market will be at the mercy of flippers who have access to unlimited funding and are only buying a home, with zero regard for cost,  in hopes of selling it to an even greater fool. Obviously, that has endless cheap credit happy ending written all over it.

As for everyone else: please pay your landlord, Blackstone, at the end of the month.

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Thu, 01/23/2014 - 13:26 | 4359300 Looney
Looney's picture

... which means that in reality, roughly about 60% of all homes are now purchased with cold, hard (cash???) freshly printed funny money.

Looney

Thu, 01/23/2014 - 13:57 | 4359499 Canadian Dirtlump
Canadian Dirtlump's picture

Apparently hedge fund / private equity money has pulled back on purchasing homes which to me is good. I find it annoying that foreign investment is buttressing over valued real estate prices in the US and Canada. I guess I need to hope for the bed to be shat in china before I can go dumpster diving for a house here.

Thu, 01/23/2014 - 14:15 | 4359581 0b1knob
0b1knob's picture

Money laundering.   Cash purchases of real estate are one of the few types of transactions the government does not track.   The houses are being bought only to be sold to launder the cash.   House flipping just like what we had in 2006-2007.

Thu, 01/23/2014 - 14:21 | 4359604 Chupacabra-322
Chupacabra-322's picture

Bush (Jeb) Crime Syndicate CIA drug trafficking money Laudering capital of the world.

They merely represent a power structure of a Step Pyamid Model of Aurthority / Monarch Reign Pyamid Model of Authority which ultimately benefits the NWO Globalite who own the Economic, Educational, Religious and Political Systems which Enslave man.

Their system is one of Debt Bondage and Enslavement. The highly educated intelligent & wealthy owners of the world banking, media, military & major corporations are in control of the world political & economic policies, so morally it doesn't really matter. They deceive, wage wars, killing and impoverish millions of the other 99% human populations, for the New World Order to satisfy their greed & arrogance, all in the name of democracy, freedom & war on terrorism. Does it sound delusional? Not if you are the so called? "God" chosen white western elephants.

There can be no secular solution to a criminal Government, until after there is a moral solution to an immoral society. "And yet the people keep looking to the criminal government and the endless revolving door of egoistic candidates as if it is they who are going to bring about a moral solution. And if, I, for example, dare to intimate that maybe, just maybe, it's up to us, as individuals and a people, to bring about a moral solution, I am tagged by some as blaming the people, not the evil overloads. And thus, we sow and we reap.

Thu, 01/23/2014 - 14:26 | 4359626 Eurodollar
Eurodollar's picture

all cash property investments .. Smells like the criminals are coming to Florida to roost. Usually with bags and suitcases full. Nice way to launder some dirt.

Thu, 01/23/2014 - 15:03 | 4359771 James_Cole
James_Cole's picture

At this pace the entire US housing market will be at the mercy of flippers who have access to unlimited funding and are only buying a home, with zero regard for cost,  in hopes of selling it to an even greater fool.

But remember they're only doing this because they're depressed about not being able to create more shitty jobs for the peons due to current tax rates. 

Thu, 01/23/2014 - 18:12 | 4360411 DoChenRollingBearing
DoChenRollingBearing's picture

In Florida, many of these bought-for-cash homes are bought by Brazalians, Venezuelans, Colombians, Argentines and even Russians.

Big money looking for a safer place.

Thu, 01/23/2014 - 18:39 | 4360506 dryam
dryam's picture

It seems very naive to conclude that cash purchases are for "flipping". Seriously ZH, why are  you "stunned" by all this "flipping".

Fiat is losing it's meaning across the globe.  A system reset is coming, we just don't know the when & how.  Cash is flowing in from all over the world, and from the top 1%er's in the U.S.  Are you going to put that cash in Twitter, bonds, PM's, or real estate?  If I had several million/billion, I'd be diversifying cash into a physical assets such as real estate.  Sure, all houses depreciate & there are indifinite maintenance costs and taxes, but there's costs & risks with every asset class, particularly fiat.

Thu, 01/23/2014 - 19:02 | 4360582 kaiserhoff
kaiserhoff's picture

If they are looking for safety they had better go to the Gulf Coast,

   and choose wisely.

Thu, 01/23/2014 - 16:39 | 4360111 giggler321
giggler321's picture

Or just the general populus, getting scared into a corner of ZIRP on savings and crashing banks of 80's, not trusting metals or <digitalCoin whatever> they enter the only thing they know as it's all around them - Real Estate.  Not that it's gonna help, just that it feels safer than in the bank, IMHO.

Thu, 01/23/2014 - 18:05 | 4360385 Son of Loki
Son of Loki's picture

Yacht Owners Seek to Salvage Deduction for Second Homes

 

Kent Webb plans to write off part of the interest he pays to finance what he considers his second home, a luxury fishing boat named the Moonlighter.

 

http://www.bloomberg.com/news/2014-01-23/yacht-owners-seek-to-salvage-de...

What recession?

Thu, 01/23/2014 - 18:12 | 4360416 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

I wonder how many free bitocoins were used to buy these houses? I rolled and made .47 of a bitcoin for free. Do that every day..FREE: http://freebitco.in/?r=224682

Thu, 01/23/2014 - 19:28 | 4360666 Dick Buttkiss
Thu, 01/23/2014 - 18:40 | 4360499 Kirk2NCC1701
Kirk2NCC1701's picture

Even if some of that cashish is being "laundered", note that (from the Fed's/Gov's perspective) it ALL seeks the USD and USD-based assets.  Money is simply changing hands, assets are changing owners, and not leaving the US, nor leaving the USD.  And we have what the Fed wants:  VoM (Velocity of Money).

In this context... Why should the Gov/Fed squawk too much?

/ Sitting in the Captain's chair, allows for a different perspective than most. /  ;-)

Thu, 01/23/2014 - 18:28 | 4360452 SandiaMan
SandiaMan's picture

Great Comments

Thu, 01/23/2014 - 18:06 | 4360384 SAT 800
SAT 800's picture

A gang of fools who imagine their buying power will be there for them in the future housing market; it won't. Typical human idiocy.

Thu, 01/23/2014 - 19:07 | 4360600 kaiserhoff
kaiserhoff's picture

Yes.

It shows how bogus and thin this "market" is and how quickly it can disappear.

Thu, 01/23/2014 - 18:57 | 4360565 Jannn
Thu, 01/23/2014 - 19:10 | 4360608 eurogold
eurogold's picture

Why is this happening ? Because no bank will give a mordgage for a Condo, so yes it is all cash, sorry I meant all FIAT.

Thu, 01/23/2014 - 19:25 | 4360654 MieleBauknecht
MieleBauknecht's picture

still think socialism is such a bad idea?

Thu, 01/23/2014 - 19:26 | 4360655 MieleBauknecht
MieleBauknecht's picture

still think socialism is such a bad idea?

Thu, 01/23/2014 - 13:17 | 4359306 El Hosel
El Hosel's picture

Elwood!

Flip Flop and Fly .... http://www.youtube.com/watch?v=NgzdgLR6tl4

Thu, 01/23/2014 - 13:18 | 4359311 NIHILIST CIPHER
NIHILIST CIPHER's picture

Chinese cash or Amerikans putting $ in hard assets?

Thu, 01/23/2014 - 13:21 | 4359341 kito
kito's picture

those assets are hard only due to the free distribution of viagra by the fed.

Thu, 01/23/2014 - 13:34 | 4359391 Miffed Microbio...
Miffed Microbiologist's picture

In my local it is definitely the Chinese. 700+ homes are often seeing only 3 days on the market according to a couple of RE agents I know. I guess Michael Crichton's book Rising Sun is due for an edit.

Miffed;-)

Thu, 01/23/2014 - 14:19 | 4359593 Never One Roach
Never One Roach's picture

Same here. I went with my brother to look at houses and an amazing number of mainland Chinese and a handful of Middle Easterners and Nigerians were laying out cashola for their children going to school here. They spend almost no time looking at the house... they ask how much and then wire in the money and that's that! No one asks any questions where the money comes from or how they got it. Most don't even get a home inspection.And these are half million dollar houses! Interestingly, the sales people told us despite the increase volume, prices have acutally dropped from last year in order for them to move the boxes faster.

WTF!?

It's truly a Golden Age for builders and house sellers in some areas.

Thu, 01/23/2014 - 18:50 | 4360548 Arius
Arius's picture

the land is limited, it is very simple really ....

Thu, 01/23/2014 - 19:37 | 4360701 Freddie
Freddie's picture

You don't own the land or house.  The county does.  What happens when all these people with tangible houses have a reset but the county still expects to get paid $7,000 a year in property taxes? 

Well in the Depression - the banksters took the homes and farms.

Thu, 01/23/2014 - 13:18 | 4359312 Rainman
Rainman's picture

" All Bitcoin " purchases by Spring !

Thu, 01/23/2014 - 13:36 | 4359402 Nue
Nue's picture

Or used dentures, wheelchairs and shuffleboard sets.

All oveseen by a woman screaming "Who runs barter town?"  

Thu, 01/23/2014 - 13:18 | 4359321 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Who's buying? Certainly not the commie chinese ;)

Thu, 01/23/2014 - 13:26 | 4359359 GolfHatesMe
GolfHatesMe's picture

Hart to tell while I am looking the other way - NAR

Thu, 01/23/2014 - 13:39 | 4359323 Kirk2NCC1701
Kirk2NCC1701's picture

Mostly "Breaking Bad" cash.

"Hi, my name is Saul Goodman, PA, and I've got cash buyers for your house.  Better call Saul!"*  ;-)  ;-)

* www.BetterCallSaul.com

Thu, 01/23/2014 - 19:44 | 4360711 eurogold
eurogold's picture

You really have issues don't you ? Why is all cash a bad thing ? Maybe you prefer another "sub-prime" fiasco ? Who would that benefit...other than the bankers ?

 

Thu, 01/23/2014 - 13:21 | 4359330 kchrisc
kchrisc's picture

My bet is that Europeans are stashing cash with "returning" dollars.

The locals may want to brush up on their Russian and German.

"Save a wall, use a guillotine."

Thu, 01/23/2014 - 14:11 | 4359567 slightlyskeptical
slightlyskeptical's picture

It's French in my area of S. Florida. You would think that I lived in a suburb of Paris at this point.

Thu, 01/23/2014 - 13:22 | 4359342 youngman
youngman's picture

I bet there are many Colombians and Venzuelans in that group

Thu, 01/23/2014 - 18:42 | 4360517 Kirk2NCC1701
Kirk2NCC1701's picture

No Argentinians though.  They can't afford jack, nor get their hand on Dollars.

Thu, 01/23/2014 - 19:17 | 4360615 eurogold
eurogold's picture

Surprise ! Any argentine with money already has a condo in Miami....and there are alot of Argentines with money.

Thu, 01/23/2014 - 13:23 | 4359344 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I envision many people running around with briefcases full of cash.

Thu, 01/23/2014 - 13:22 | 4359345 Sudden Debt
Sudden Debt's picture

IT'S CASH ON THE SIDESLINES STEPPING IN!

it's a bit like cash out of thin air but with another name

Thu, 01/23/2014 - 13:25 | 4359349 fijisailor
fijisailor's picture

Tyler you missed the class of real estate investor who was just a prudent saver and bought the market at its low.  Obviously that was not in December of last year though but in 2008.  I know there aren't many of us like that in this country but there are also a lot of foriegners buying into FL real estate.

Thu, 01/23/2014 - 13:25 | 4359353 geno-econ
geno-econ's picture

Hot drug money from South of the border ? No surprise if birth rate skyrockets in Florida and it is not because Bob Dole and the elderly are using Viagra !

Thu, 01/23/2014 - 13:43 | 4359441 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

South Florida, Like South Texas and South Cali are hotbeds for the cartel not to mention droves of third world mongrels looking for work.

Thu, 01/23/2014 - 13:28 | 4359369 LawsofPhysics
LawsofPhysics's picture

Say it with me "fungibility" - unintended consequences?

 


fungibility

    Use Fungibility in a sentence
fun·gi·ble

[fuhn-juh-buhl] Show IPA adjective Law.
(especially of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.

Thu, 01/23/2014 - 13:28 | 4359377 juicemoney
juicemoney's picture

Makes sense really.

 

Anybody who has capital tied up in derivatives, stocks or fiat currency is bailing into the first assets they can find. If I was a foreign investor, big-time banker or large scale drug dealer I'd be doing the same.

Thu, 01/23/2014 - 13:41 | 4359434 Professorlocknload
Professorlocknload's picture

And anyone who has capital tied up in stacks of Ben Franklins, see's what's coming, maybe?

It's all flight capital. Flight from foreign and domestic authority, ie, their Credit Currencies.

Thu, 01/23/2014 - 14:02 | 4359519 Hal n back
Hal n back's picture

all the stock gains of the last 5 years are going into retirement homes--more or less a "freebie".--a guy how had 3 mil invested in markets has doubled it-more if picking the right stocks-so take the 3 mil, pay tax and buy the house of your dreams.

 

now the only problem is paying for upkeep and taxes etc.

 

 

Thu, 01/23/2014 - 14:07 | 4359550 Blankenstein
Blankenstein's picture

Yeah, putting all your money in at this top of the reinflation of the housing bubble will be a good decision.  With upkeep and taxes you forgot to add falling prices when the interest rates rise and the specuvestors head for the exits.

Thu, 01/23/2014 - 13:30 | 4359379 Oldwood
Oldwood's picture

The Chinese have nothing on us. They may have ghost cities but we are just spreading them out so as to not be as noticable. How many of these cash buys are occupied versus just holding for the price to go up? Most investors are not all that interested in being property managers.

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