Cash talks. And it’s speaking loudly in California real estate these days, even in the nicest parts of town.
In the Southland’s $1 million-and-up market, 29.2% of buyers paid cash last year - the highest percentage since 1994, DataQuick statistics show. For home selling for $5 million and up, 62.2% paid cash.
Cash buying has reached fever pitch in parts of Orange County, where the Balboa community of Newport Beach saw the highest percentage of sales going to cash buyers last year of any $1-million-plus Southland community – 66.7%.
Other big cash markets were Montecito, with 57.2% of sales, and Beverly Hills, with 45.6%.
One reason for the high percentage of cash sales is that luxury properties are hard to value, making it harder to get a loan.
Another factor contributing to the high percentage of all cash deals in luxury markets is the prospect of being turned down for a loan because the qualifications process has gotten much more difficult for jumbo loans.
Source: LA Times Realty section, 3-1-11