Jan. 19: All cash buyers continue to show strength; home prices still rising

Rob Chrisman

Rob Chrisman began his career in mortgage banking – primarily capital markets – 31 years ago in 1985 with First California Mortgage, assisting in Secondary Marketing until 1988, when he joined Tuttle & Co., a leading mortgage pipeline risk management firm. He was an account manager and partner at Tuttle & Co. until 1996, when he moved to Scotland with his family for 9 months. See more

What does Florida have that the rest of us don’t? The highest percentage of cash buyers according to Zillow’s latest research. As of the second quarter of 2015 with 51 metros analyzed, cash purchases of homes were far more common in Midwestern and Southeastern markets, particularly in Florida, than in the Western U.S. The five markets with the highest percentage of all-cash home purchases were all in Florida. Metros with small shares of cash buyers tend to have younger populations, while markets with higher shares of cash buyers tend to have a larger proportion of households headed by a widow/widower.


Interestingly, among the 10 markets nationwide with the lowest share of cash buyers, only one is not in the west – Worcester, Massachusetts, with 21 percent of home purchases made with cash. Colorado Springs has the lowest share of cash buyers among large metros analyzed, at 14 percent.


The fishing is good, or more appropriately in this case, the crabbing. Just ask “Deadliest Catch” TV show former captain Bing Henkel. He recently sold is nautical-themed home in Sammamish WA for a mere $3.65 million. 3300 sq. ft. featuring 80′ of low-bank waterfront, a private dock with boat & ski lift and eight total parking spaces. If a picture is worth a thousand words, you will have full-fledged laryngitis after viewing this home!


If you think that the economy is not being impacted by oil price declines, consider this: the state of Alaska is considering imposing an income tax for the first time in 35 years as oil revenues decline.


Real estate agents are asking their clients, “Why pay more?” That is one important question that should be asked of home renters. Ultimately, buying costs less than renting – 23 percent cheaper in fact with the exception of a few more expensive cities according to CNN Money.  A potential homebuyer who is vacillating between the worlds of renting and buying should be aware the cost to rent has been rising. Research data compiled forecasts this trend to continue.


While it is true more people, buyers and sellers alike are using the internet to search for “home” information, the internet will not supply all the intricate steps involved in the complex process of buying or selling a home. Although the millennial’s have been utilizing the internet since in utero, the bottom line is Realtors are still necessary in the complex world of home ownerships.


Guidance and expertise is a necessity when taking the huge and complicated step of home purchasing. Buyers want their agents to help them find the right home, negotiate a great deal and help them with all the paperwork. Sellers, on the other hand, want their agents to market their home to potential buyers, sell it within a particular period and price it to sell.


The Federal Reserve’s FedCommunities.org web site, has been updated with easy access to the growing number of Fed resources related to community development across the country. Updates include new video, research, data, publications and webinars pertinent to the topics of housing and the Community Reinvestment Act (CRA). Available information topics such as the upcoming 2016 National Interagency Community Reinvestment Conference, which will be held Feb. 7-10, 2016, in Los Angeles.


Additional resources covering housing and CRA include: The Community Development Data Inventory, compiled by the Philadelphia Fed, The Kansas City Fed’s “CRA OneSource” site that which includes CRA tools, templates, guides and webinars. The St. Louis Fed’s Housing Market Conditions report, which provides a quarterly snapshot of conditions in the U.S. and in the Eighth District states. These are just a few of the hundreds of online community development resources that are updated frequently by the Federal Reserve Board of Governors and its 12 regional Reserve banks, and made easily accessible via the FedCommunities.org centralized website.


Zillow has published on article indicating that the  share of homes underwater has been on the decline, as the U.S. negative equity rate has dropped to 13.4 percent in the third quarter from 14.4 percent the second quarter and 16.9 percent last year. The negative equity rate has dropped 14 consecutive quarters after its peak of 31.4 percent in the first quarter of 2012. Still, more than 6.5 million homeowners are underwater, as more than 30 percent of Americans with a mortgage are underwater, in negative equity or lack enough equity to sell their home and buy a new one. Negative equity does affect both the supply of homes for sales and the demand, as those underwater are unable to sell their home and buy a new one.


This also impacts first time homebuyers looking to buy, as available inventory becomes more strained. Homes that are listed for sale in markets where there is a greater share of households in negative equity often stay on the market longer as well. The areas where negative equity is most common include the Southwest, Southeast and parts of the Midwest. For example, Las Vegas (22.1 percent) and Phoenix (16.4 percent) have higher rates of negative equity, along with Chicago (20.6 percent), Atlanta (18.6 percent) and Orlando (16.1 percent). Whereas areas like San Francisco and San Jose have negative equity rates below 5 percent, which correlates to greater job opportunities and stronger income growth. Although the number of households underwater is dropping, there is still a strong presence of homes in negative equity, delaying many markets from recovering and reducing the share of available inventory even more.



A Spanish teacher was explaining to her class that in Spanish, unlike English, nouns are designated as either masculine or feminine. ‘House’ for instance, is feminine:  ‘la casa.’ ‘Pencil,’ however, is masculine: ‘el lapiz.’

A student asked, “What gender is ‘computer’?”  Instead  of giving the answer, the teacher split the class into two groups, male and  female, and asked them to decide for themselves whether ‘computer’ should be a masculine or a feminine noun.  Each group was asked to give four reasons for its recommendation.

The men’s group decided that ‘computer’ should definitely be of the feminine gender (‘la computadora’), because:

  1. No one but their creator understands their internal logic; 2. The native language they use to communicate with other computers is incomprehensible to everyone else; 3. Even the smallest mistakes are stored in long term memory for possible later retrieval; and 4. As soon as you make a commitment to one, you find yourself spending half your paycheck on accessories for it.

The women’s group, however,  concluded that computers should be Masculine (‘el computador’), because:  1. In order to do anything with  them, you have to turn them on; 2. They have a lot of data but still can’t think for themselves; 3. They are supposed to help you solve problems, but half the time they ARE the problem; and 4. As soon as you commit to one, you realize that if you had waited a little longer, you could have gotten a better model.




(Copyright 2016 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)