This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

Not really the same but we are buying out my sister-in-laws with all cash for my MIL's house in Martinez. Using some of the inheritance cash, some Roth IRA liquidation and some I-bond liquidation. Hate selling the I-bonds. Son will move in and pay us until we die and then inherit the house (and other assets). He will divy up with his twin sister.

dimitrig said:

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This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

Are people actually paying cash or are they just making all cash offers? I know a lot of people who make all cash non-contingent offers but still finance things. In other words, all cash might just mean no financing contingency.

Unit2Sucks said:

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dimitrig said:

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This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

Are people actually paying cash or are they just making all cash offers? I know a lot of people who make all cash non-contingent offers but still finance things. In other words, all cash might just mean no financing contingency.

---

Good point. I am not sure the sellers know the difference as they just get a check either way.

People could be borrowing against other assets behind the scenes. For example, the parents of young couples might be taking out huge home equity loans to help them finance their cash offers.

Agreed @unit2 sucks. All cash is not always all cash. Many of the creative financing options are not cash. However , treated like cash in many respects per Hard Money or otherwise. Lots of purchases are cash but loans being used as well.

I've been active in the market for years. The recent shift per COVID has allowed lots of CA trade up buyers to capitalize out of state - Resulting in cash purchases . Also, locally the cash craze is happening as well. Sellers from SF/Peninsula transfer equity through 1031 exchange and purchase in the East Bay all cash. This market knows no bounds. #Buckleup

Free Biden money. Easy to get. Borderline fraud but if you do it right, it's legit. I know a couple friends living in Taiwan that got loans from Biden lol that was intended for Americans.

dimitrig said:

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This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

I would guess private equity like Blackstone. Also, potentially foreign purchases who are looking to deploy excess cash.

Unit2Sucks said:

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dimitrig said:

---

This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

Are people actually paying cash or are they just making all cash offers? I know a lot of people who make all cash non-contingent offers but still finance things. In other words, all cash might just mean no financing contingency.

---

How do they get financing without an appraisal condition?

A significant minority of folks were doing plenty well before the pandemic... and then a lot of them continued to do well -- or even better -- through the pandemic.

Big C said:

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A significant minority of folks were doing plenty well before the pandemic... and then a lot of them continued to do well -- or even better -- through the pandemic.

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I suspect April reduced a lot of those gains.

Big C said:

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A significant minority of folks were doing plenty well before the pandemic... and then a lot of them continued to do well -- or even better -- through the pandemic.

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Sure, but generally only investors paid cash for properties and often it was because they didn't want appraisals or other contingencies to stand in the way of a deal - for example when buying foreclosures, properties with cloudy title, fixer uppers, or distressed properties.

It seems odd to me for someone who is buying into decidedly middle class markets in order to live there to pay cash. It has always been common at the top end of the scale but generally people don't dump their life savings into a house. They keep some in reserve.

I knew a wealthy woman who had a mortgage on her house despite being able to pay it off 100 times over because the interest rate was so low that her money was better served elsewhere. Eventually, she did pay off the mortgage when she got tired of making payments on it but she had a mortgage for a good 5 years at least.

I can't imagine that these people making $1M cash offers actually have $3-4-5-10M in the bank in reserve but are choosing to buy rinky dink houses in the suburbs to reside in. Maybe I am wrong about that, but something seems off to me.

The more I think about it the more I think they are getting help from parents or others sitting on a pile of home equity. That has always been the case, but in the past parents gave couples the down payment. However, in this competitive market I could see parents borrowing against their property to facilitate a cash offer and the kids paying them back in installments.

Foreign investors and real estate investment groups (especially buying properties to AirBnB, which I revile) make up some of the market but they're not buying middle class homes in Fullerton for over $1M cash.

hanky1 said:

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Free Biden money. Easy to get. Borderline fraud but if you do it right, it's legit. I know a couple friends living in Taiwan that got loans from Biden lol that was intended for Americans.

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Fooking amazing to me you want to try and use this to attack Biden. This is what boils my blood.
Trump ran large deficits with low interest rates. And besides, the Fed and Congress play major roles in both of those things, not 1600 Penna.

concordtom said:

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hanky1 said:

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Free Biden money. Easy to get. Borderline fraud but if you do it right, it's legit. I know a couple friends living in Taiwan that got loans from Biden lol that was intended for Americans.

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Fooking amazing to me you want to try and use this to attack Biden. This is what boils my blood.
Trump ran large deficits with low interest rates. And besides, the Fed and Congress play major roles in both of those things, not 1600 Penna.

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yeah but who was the president giving away hundreds of billions with no oversight? There are literally thousands of examples of fraud and even legit cases like my friends in Taiwan which was legal but not ethical.

oh yeah here's a headline free the liberal sunshine rag Washington Post this year:

"Immense fraud' creates immense task for Washington as it tries to tighten scrutiny of $6 trillion in emergency coronavirus spending"

"Fraud and identity theft continue as watchdogs wonder whether they can recover all that was stolen"

calbear93 said:

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Unit2Sucks said:

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dimitrig said:

---

This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

Are people actually paying cash or are they just making all cash offers? I know a lot of people who make all cash non-contingent offers but still finance things. In other words, all cash might just mean no financing contingency.

---

How do they get financing without an appraisal condition?

---

You don't need a condition in order to obtain financing. In some cases people are doing traditional 30 day close with no conditions. In some cases, shorter close and they finance on the back end. Some people do securities backed loans and then follow up with a traditional mortgage.

In order to be competitive you need an "all cash offer" and that really just means that you don't include an appraisal, financing or inspection contingency. You can still go out and get an appraisal and an inspection. As a practical matter, if you find a problem you can weasel your way out of escrow because anything material gives you a 72 hour rescission right in California.

If I were buying a house using traditional methods (20% down, 80% mortgage), I would absolutely go in without those condition unless I truly had a concern about specifics or knew I would have trouble financing. Even if appraisal comes in low, it's not binary, you just need to increase down payment to make up shortfalls.

dimitrig said:

---

This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

It's not that hard. I haven't paid all cash (IMO that's kindof stupid unless you're maxed out on 8 loans) but I took a very cheap loan against my existing properties (which have skyrocketed in value...between 3.2-3.5% rate for an INVESTMENT property which is insanely low) and then used it to buy 3 properties last year in Indio which I'm renting out on AirBnB. I'm pulling $3k / day on each property on AirBnB during Coachella. Non-Coachella days can still pull ~$350 / day.

Unit2Sucks said:

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calbear93 said:

---

Unit2Sucks said:

---

dimitrig said:

---

This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

Are people actually paying cash or are they just making all cash offers? I know a lot of people who make all cash non-contingent offers but still finance things. In other words, all cash might just mean no financing contingency.

---

How do they get financing without an appraisal condition?

---

You don't need a condition in order to obtain financing. In some cases people are doing traditional 30 day close with no conditions. In some cases, shorter close and they finance on the back end. Some people do securities backed loans and then follow up with a traditional mortgage.

In order to be competitive you need an "all cash offer" and that really just means that you don't include an appraisal, financing or inspection contingency. You can still go out and get an appraisal and an inspection. As a practical matter, if you find a problem you can weasel your way out of escrow because anything material gives you a 72 hour rescission right in California.

If I were buying a house using traditional methods (20% down, 80% mortgage), I would absolutely go in without those condition unless I truly had a concern about specifics or knew I would have trouble financing. Even if appraisal comes in low, it's not binary, you just need to increase down payment to make up shortfalls.

---

That's crazy. I guess we are all still riding the monetary sugar high.

calbear93 said:

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Unit2Sucks said:

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calbear93 said:

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Unit2Sucks said:

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dimitrig said:

---

This is just anecdotal evidence, but it seems everyone I has talked to who has sold their house recently (in the last year at least) has said that the buyer paid all cash.

That is true whether it was a $2M house in California or a $600-800K house in North Carolina, Nevada, Washington state, Colorado, or even South Dakota.

Of course some of this is because people in expensive states like California are selling their homes and buying cash in cheaper states. That makes some sense.

However, every person I have talked to who has sold their house in California ALSO said the buyer came to the table with an all cash offer.

So the obvious question is... where is all this cash coming from?

I asked one acquaintance of mine what the "kid" who bought his house for $1.5M cash did for a living and he said "trust fund baby."

With prices being sky high this seems like the WORST time to pay all-cash. I realize that people feel forced to do so because sellers aren't accepting any contingencies (even finance contingencies) but the number of people out there dropping $1M+ cash on properties is staggering.

With so much cash flying around the real estate market is ignoring the interest rate rises.

Where is this headed?

---

Are people actually paying cash or are they just making all cash offers? I know a lot of people who make all cash non-contingent offers but still finance things. In other words, all cash might just mean no financing contingency.

---

How do they get financing without an appraisal condition?

---

You don't need a condition in order to obtain financing. In some cases people are doing traditional 30 day close with no conditions. In some cases, shorter close and they finance on the back end. Some people do securities backed loans and then follow up with a traditional mortgage.

In order to be competitive you need an "all cash offer" and that really just means that you don't include an appraisal, financing or inspection contingency. You can still go out and get an appraisal and an inspection. As a practical matter, if you find a problem you can weasel your way out of escrow because anything material gives you a 72 hour rescission right in California.

If I were buying a house using traditional methods (20% down, 80% mortgage), I would absolutely go in without those condition unless I truly had a concern about specifics or knew I would have trouble financing. Even if appraisal comes in low, it's not binary, you just need to increase down payment to make up shortfalls.

---

That's crazy. I guess we are all still riding the monetary sugar high.

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As they say: we know how it ends, just not when. Could be a bumpy ride while the Fed gives us our medicine over the coming months.