Mid-year is upon us and not much has changed since the last report. I did notice an interesting trend regarding CASH in our marketplace. Here’s the deal. There have been 136 home sales in Duck and Corolla since January.
Of those 136 home sales:
- 32 Cash
- 13 Jumbo Loans
- 91 Conventional Loans
A conventional loan amount is $726,200. With the typical 20% down, that means a purchase price of around $875,000.
- Only 53 of the 136 homes sold were under $900,000
- 83 homes sold over $900,000 up to $6,300,000
- 13 were jumbo loans
- 22 were cash
- The average price is $1,251,000
- The median sales price is $992,500
A jumbo loan amount is anything over the $726,200. There were only 13 of those reported. There were 48 Conventional loans in the $900,000 and up price range. This means that 48 buyers out of 83 brought enough cash to the table to get their mortgage at or under $726,200.
To paint a clear picture – 32 cash buyers, 48 mostly cash buyers. That’s 80 buyers (60%) who brought a ton of cash to the closing table to buy a home on the Outer Banks. Including the highest sale of the year so far – $6,300,000 ALL CASH!!!! This just seems amazing to me. (Here’s a link Click Here to View Listings to that home if you want to see what $6.3M gets you)
This is a clear indication that buyers have no problem parking cash in a beach home right now. I mean, why not? Let’s look at the 3 main reasons this could be a good idea.
- Rental income – If you choose to rent, the income will at the very least cover your mortgage. That means, future equity you reap, all paid by SOMEONE ELSE.
- Bank Failures – With banks failing across the country, and the Dodd-Frank Bill legalizing, if not mandating, “bail-ins” a lot of people don’t feel safe keeping their cash susceptible. Rather, they are investing in a tangible asset, and one they can enjoy themselves and have others pay for!
- Inflationary Fiat Dollar – Let’s get real, the price of real estate will NEVER go to zero. As inflation spikes even more and more out of control, the dollar is tumbling closer and closer to zero. It seems buyers are hedging their bets on the tangible asset of real estate versus the tumbling value of the dollar.
We haven’t even begun to see the effects of the commercial real estate crisis looming. This is widely affecting regional banks who are holding the notes on these buildings that are sitting empty in record numbers across major cities.
Don’t get me wrong, my message is not of doom and gloom. What’s going to happen is going to happen. My point is, what is your best move?
If you are considering selling, there are cash buyers waiting for your home. We do have investment vehicles where you can put your money and AVOID capital gains tax in the meantime. Contact me for more information.
If you are thinking about buying, get off the fence and don’t let the interest rates deter you. You won’t have much competition buying right now and there are some great opportunities out there!
