Tagged: fast closings

Sep 13

What Michigan’s All Cash Real Estate Market Means For Buyers…

Who’s broke? Not Michigan according to the latest figures…

The city of Detroit might have filed for bankruptcy, but the local real estate market appears to be flush with more cash than ever before.

The latest data and a new report from 24/7 Wall Street shows that U.S. real estate transactions are increasingly being made with cash, not credit. In fact, nationwide 40% of recent real estate sales where cash.

More significantly; Michigan ranked 4th out of all U.S. states for the highest percentage of cash sales at a dizzying 53.1%. That number gets even higher in SE Michigan, at almost two thirds according to RealtyTrac.

Why the cash money frenzy?

This cash only trend is emerging for a variety of reasons. In many cases it is a matter of needing to put savings to work, and there isn’t much that can come close to touching real estate today.

Low home prices (MI has the 4th lowest) are also a major factor. Home loans haven’t been incredibly easy to come by in recent years and most mortgage lenders don’t want to bother with making tiny loans. Plus, who wants to fatten the bank’s wallets today anyhow?

So what does this cash heavy real estate market means for Michigan home buyers and investors?

For a start it signals an incredibly strong local housing market and underlying economy; one with lots of equity that will cushion it against fluctuations for a few decades.

Of course it also means that shopping for property in Southeast Michigan is highly competitive today. So you’ve got to move quickly, and be organized.

Sadly, this has led some into forgoing critical due diligence, which can often be extremely expensive, even to the point of far outweighing what they paid for properties in the first place.

The bottom line is that it is crucial to find a great title company partner for quick title searches, title insurance  and fast closings. They’ll come in handy with additional help for refinancing later on too, or closing on commercial loans to stay liquid and expand. After all, with long term interest rates so low is crazy not to use them!

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