Wow, the real estate market in Salt Lake County is hot right now. It may not be as crazy as the Bay Area, but it sure does feel like it. As of today, March 11th 2020, there are only 1,215 active residential properties listed in the county. That's 44% lower than last year, and is just over 1/3 of the available market in 2015.
So why am I thinking about this right now? I hosted an Open House this weekend and going into it, I knew it was a great house and that lots of people were going to be interested in it. It was also priced perfectly by the seller and their agent to attract a buyer quickly. I was also able to meet all of the people who presented offers and hear a little bit about there thoughts around their offer. Did I see their offers, no. So I'm not 100% clear on all of the details offer, but I'm sure everyone went in over asking, and the winning offer was cash.
I heard it all the time in CA, "My offer was beat by someone bringing all cash to the table", and I've now heard it from several people in SLC. Are you in the market and experiencing this? Well if you're here, I've got some news for you. "You are not alone, but it's nothing new." I'm an analyst by trade and love digging into data to understand what really is happening.
Would it bug you to know that purchases of single family homes using cash hasn't changed much. I'll tell you I was surprised when I saw this, and I hope this makes you feel at least a little better. With 9 of 10 still being financed in today's market it really shows the importance of getting pre-approved, not just pre-qualified.
The next thing I think all of you people still using financing to purchase your home should know, is that you are possibly ending up with a better deal than those paying cash.
Based on our data here in SLC for single family homes, the median sales price for a cash offer home in 2019 was 7.5% higher than for those financing, with it being just over 12% higher in Q3. This makes sense at the end of the day, because cash offers don't have the same appraisal requirements as loans. You should say to yourself, but wait doesn't paying cash get you a discount on everything else in life. Yes! So, yikes!
For those paying cash, remember it's already attractive that you're paying cash. Don't end up paying more than you need, and if you want to pay cash Dec/Jan seem to give you the best bang for your buck. One thing to consider though is it's likely not going to shorten your time to close, because it's still probable that person your buying from is paying for their next place with a loan. Lastly, if you're thinking about paying cash check out this Forbes article.
Let me know what your thinking. Would love to hear your thoughts. Email me @ firstname.lastname@example.org.
Data is from UtahRealEstate.com.