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Cash Sales Share Falls for 20th Straight Month

money-houseAll-cash transactions continued their trend of annual declines in August, accounting for a little more than a third of total home sales.

According to CoreLogic [1], cash sales made up 33.8 percent of total home sales [2] in August, down from 36.4 percent the year prior. Cash sales peaked at a share of 46.3 percent in 2011 and have fallen continually on a yearly basis every month since the start of 2013.

CoreLogic's latest data follows another recent report from RealtyTrac [3], which showed all-cash buyers accounted for 33.9 percent of single-family home and condo sales in the entire third quarter as institutional buyers also backed off from the market.

While cash sales in August were up slightly compared to July, CoreLogic says comparisons should be made on a year-over-year basis "due to the seasonal nature of the housing market."

According to the company, REO sales held on to the largest wedge of cash sales in August, accounting for 56.9 percent of transactions made without traditional financing. That category was followed by home re-sales at 33.4 percent, short sales at 31.8 percent, and new home sales at 16.5 percent.

While REO properties accounted for the biggest percentage of cash transactions, CoreLogic senior economist Molly Boesel noted that REO transactions only made up 7.2 percent of total home sales in August.

"A trend to watch is the cash share of re-sales, which has fallen almost 14 percentage points from its peak cash share of 47.2 percent in February 2011," Boesel said. "This category will determine the direction of cash sales going forward, since re-sales make up the largest share at 80.4 percent of all sales."

Looking at state-level activity, Florida once again had the largest cash sales share of any state, owing to a more active investor presence. Cash sales made up 49.8 percent of total home sales in the state in August.

Just behind Florida was Alabama with a cash sales share of 48.9 percent, followed by West Virginia (45 percent), New York (44.4 percent), and Delaware (44 percent), according to CoreLogic.