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January 3rd, 2012 3:53 PM by David W. Welch
Actually, cash sales have dominated the Orlando real estate market for the last three years, and cash continued to be king in 2011. There were over 29,000 sales closed in Orlando in 2011 - Wow! Of those sales that closed last year 53.4% (over half, one in two, the majority) were cash deals. I ran the numbers and that means nearly $1.7 billion in transactions closed without financing. That is a lot of greenbacks flowing into the Orlando area.
I broke things down a little bit, because a lot of the cash transactions take place in the lower price ranges as investors continue to snag deals. Of all homes priced below $50,000, 5,212 or 94.4% were all cash deals. Many of these are condos, and there just is no financing available for the vast majority of condominiums here in the Sunshine State. The prevalence of cash sales drops off considerably above $50,000. Of the homes priced between $50,000 and $100,000 65% of the sales last year were still all cash. Homes priced from $100,000 to $200,000 drop off quite a bit more with only 35.8% being cash transactions. Even among homes priced above $200,000, 28.1% still closed without any financing.
With prices rising the last several months, and the lower inventory of properties for sale I am curious to see if cash continues to flow so swiftly into our market. With an affordability index around 200 and rents 30% higher than owning, Orlando continues to provide a good return on investment for real estate investors. Did somebody say show me the money?