How does our market keep trucking along with sky-high prices AND mortgage rates 2x higher than they were three years ago? How does pricing levitate when money is so much more expensive – shouldn’t prices adjust downward?
We know that the generational wealth transfer of $70 to $80 trillion dollars is underway, and this is where some of it is showing up – purchases of quality real estate.
There have been 115 closings between La Jolla and Carlsbad this month, and 47% of them were all-cash. It’s the highest percentage we’ve seen so far, and it’s likely to continue.
Those who aren’t paying all-cash have big down payments to help cushion the higher rates. Payment too high? Put more down!
For the downsizers, it’s the best way to justify giving up the 3% mortgage too – sell the long-time family estate and buy the next one all-cash.
Last month’s 200 sales will probably be the highest monthly count we’ll see in 2024, so the market will have to endure less volume, and more listings sitting around unsold.
It means that the percentage of all-cash buys will probably be increasing. I think it could get up to 66% by the end of the year!
Amazon to FedEx to DoorDash to tele-health to self-driving; technology/innovation is going to keep aging seniors in place for far longer than the market can accommodate.
Personally I truly cannot imagine the incentives sufficient to entice us to relocate never mind downsize.
It’s not just seniors either. It’s every homeowner.
Everyone has bought their forever home, whether they knew it or not.
It would take an abrupt life-change (death, divorce, job transfer) or a large cash inflow (generational wealth transfer or lotto) to get people to move now.
Flippers are buying homes for cash. Then they flip the homes to people with a mortgage. Hence, the 50% sales being all cash sales. Just a guess.