The second quarter of 2014 saw fewer all-cash home sales than the first quarter as institutional investors backed off from the market.
In a quarterly report released Tuesday, RealtyTrac reported all-cash transactions made up 37.9 percent of all single-family home and condo sales in April, May, and June, down from the first quarter's three-year high of 42.0 percent but up from 35.7 percent in the year-ago quarter.
RealtyTrac's data compares with the latest from CoreLogic, which reported that all-cash sales hit a four-year low in May.
The decline came as the share of sales to institutional investors—defined by the company as those that purchase at least 10 properties in a year—fell to 4.7 percent, its lowest level since the start of 2012.
"The flurry of purchases by institutional investors and other cash buyers that kicked off two years ago when U.S. home prices hit bottom is finally showing signs of subsiding," said RealtyTrac VP Daren Blomquist.
Over the past two and a half years, cash sales have made up 39 percent of all home sales on average, which institutional investor purchase accounting for 5.3 percent, according to Blomquist. In the decade before that, the average quarterly cash share was less than one-third (30 percent), while institutional investor activity made up only 2.6 percent of all sales.
As all-cash and investor activity come down, Blomquist said the news is mixed.
"The good news is that fewer cash buyers should help loosen up inventory of homes for sale and reduce competitive bidding, giving first time homebuyers and other non-cash buyers more opportunities," he said. "The bad news is that some of those first time homebuyers and other non-cash buyers may already be priced out of the market thanks to the rapid run-up in home prices over the past two years in many areas."
Breaking down the data, RealtyTrac found cash sales in the second quarter were mostly concentrated at both ends of the price spectrum. According to the company, all-cash sales accounted for 67 percent of purchases of homes selling for $100,000 or less and 45 percent of purchases of homes selling for more than $2 million.
Out of all the metro markets in the report with populations of at least 500,000, the top six areas with the highest percentages of cash sales were all in Florida: Miami-Fort Lauderdale-Pompano Beach; Cape Coral-Fort Myers; Sarasota-Bradenton-Venice; Tampa-St. Petersburg-Clearwater; Lakeland; and Orlando Kissimmee.
Las Vegas, New York, Detroit, and Kansas City rounded out the top 10, all with cash sales shares close to 50 percent.
Among institutional investors, homes purchased in the second quarter sold at an average price of $147,017, more than a 10 percent discount from their average estimated full market value of $164,553.
The largest markets for institutional investor activity in Q2 were Atlanta-Sandy Springs-Marietta, Georgia; Las Vegas-Paradise; Jacksonville, Florida; Memphis; Charlotte-Gastonia-Concord, North Carolina/South Carolina; and Knoxville, Tennessee, all with shares at or higher than 10 percent.