Due to the summers increase in mortgage rates home buyers throughout the nation and in Denver who are able to pay cash are finding more favorable markets.
Nationally for every ten home sales in July, 2013 four of home buyers paid in cash. These numbers are up from thirty five percent in June and up from thirty one percent in July, 2012.
Areas seeing the sharpest increases of cash buyers include St. Louis, Dallas and Los Angeles while accounting for twenty seven percent of Colorado home sales in July. Colorado also maintained a slightly higher than average number of bank owned homes at eleven percent vs the nine percent national number.
Part of what could be driving the higher percentage of cash buyers vs the whole is that higher mortgage rates have caused a decrease in purchasing power for those home buyers who can not pay cash. Taking some home buyers out of the market because they can no longer afford to buy in higher priced market places.
Goldman Sachs estimates that as many as half of the home sales occuring since 2012 involved cash buyers. Investors, both individual and institutional, were buying up properties to offer as rentals.
Based upon the number of July residential properties sold the estimated annual pace is expected to reach 5.5 million which is a four percent increase from the previous month and an eleven percent increase for the previous year.
Even with the strong increase in national sales numbers eight states saw a decline in the number of homes sold even though four of those eight still has some of the strongest gains in home prices. Including Georgia, Nevada, Arizona and California.
A study conducted by Zillow (based out of Seattle) concluded that the number of nationwide home owners that were upside down on their homes (owing more than the homes value) declined to 12.2 million from the first quarters number of thirteen million.
Denver's number of homeowners ( 15.3% ) in a negative equity position is well under the national average ( 23.8% ).
The numbers show that the recent trend of increasing home prices has helped home owners previously in negative equity positions though many still remain deeply underwater and might remain so for years to come.