Cash Sales of Manhattan Beach Homes Hits New Record

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The percentage of homes purchased with no mortgage in California in 2012 was reported at a record 32.4%, a bit more than twice the usual rate.  This might not be surprising considering the large number of investors who were snapping up bargain properties. especially foreclosures. It was, perhaps,  more surprising that similar numbers were reached in the Beach Cities where home prices tend to be significantly higher than the state median price, and foreclosures  are rare.  According to data from CoreLogic,  cash sales of Manhattan Beach homes were 29.6% of the homes sold in 2012, a new record.  Hermosa Beach similarly saw 29.19% cash sales while Redondo Beach finished the year at 24.8%

This spring we have seen rising sales and even lower inventory levels than last year.  This has created competition for homes that resulted in multiple offers on almost every sale in Manhattan Beach.  While the buyers’ motives for offering all cash may vary, one thing is clear.  Cash offers have become more common as the market heated up.  In the first four months of the year, 37.23% of the sales in Manhattan Beach were all cash transactions, and 35.29% of Hermosa Beach sales were also cash.  Gone are the days when buyers expected a discount on the price for the peace of mind promised because the buyer did not have to apply for a loan.  Today cash buyers are often the highest offer the seller receives.  So beside side-stepping the difficulties of qualifying a buyer for a loan in today’s less than friendly lending environment, another problem is solved, that of the appraisal.  As prices are bid up, the appraisal may not keep pace.  Usually cash offers do not have an appraisal contingency.  In some cases, buyers may opt to put financing on the property after the close of escrow.  In other cases, after proving their ability to close with cash, some buyers ask the seller for permission to apply for a loan, with the promise that it will not be a contingency of the offer.  In any case, c
ash offers have become the winning strategy in multiple offer scenarios.