For the past four months, most residential sales were accomplished by the buyer bringing cash to the closing. The fact that conventional mortgages have dried up has caused the cash deals to look like they are soaring. In fact they are not. They are continuing at about what looks like a normal pace. Since 2001, which is as far back as our statistics go, there has been between 200-400 sales each month that are all cash closings. From July 2006 through December 2007, the cash closings declined into the 160 to 190 range. Beginning in January 2008, cash closings rose back to the levels we used to see.
Cash closings are jumping out at us right now because of the imbalance in conventional mortgage availability. The reduced number of conventional mortgages creates a perception that there is a boomlet in cash deals. The reality is nothing has replaced conventional mortgages. There is a slight increase in FHA mortgages. The surprise is that more of these types of loans are not being done. Tapping into FHA and VA mortgages which have recently streamlined their processes would seem to be a no-brainer, but they are not really making a dent in the market.
Can anyone explain that? Clearly, the availability of conventional money is desperately needed in the Tampa Bay real estate market and specificaly for Clearwater real estate sales to increase. As of now short sales in Clearwater and short sales in Tampa Bay at large will dominate our market for some time.
Cash closings are jumping out at us right now because of the imbalance in conventional mortgage availability. The reduced number of conventional mortgages creates a perception that there is a boomlet in cash deals. The reality is nothing has replaced conventional mortgages. There is a slight increase in FHA mortgages. The surprise is that more of these types of loans are not being done. Tapping into FHA and VA mortgages which have recently streamlined their processes would seem to be a no-brainer, but they are not really making a dent in the market.
Can anyone explain that? Clearly, the availability of conventional money is desperately needed in the Tampa Bay real estate market and specificaly for Clearwater real estate sales to increase. As of now short sales in Clearwater and short sales in Tampa Bay at large will dominate our market for some time.
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