Money talks. Loud.
And cash is increasingly the language of apartment purchases in metropolitan Atlanta, as 53% of purchases were made in cash last year. According to the data, this is more than double the share of cash purchases recorded two years agoNo, a proprietary data provider.
Deep-pocketed individuals make up the majority of these cash buyers, but Wall Street also makes up a large portion.
Investment companies accounted for more than a third of all cash purchases last year, or one in five total home purchases in the Atlanta area. The proportion of purchases by investors essentially tripled between 2020 and 2021 fell slightly last year, Attom data show.
Undersubway followed by Attom, Atlanta ranked highest for investor purchases and ninth for cash. Georgia was generally a cash-friendly market: Six of the regions with the highest number of cash buyers are located in Georgia.
In February, The Atlanta Journal-Constitution published American Dream for Rent, a series of investigations that found that large investment firms have purchased and converted tens of thousands of homes across the region into rental properties. An AJC analysis found that Wall Street investors are putting homeownership out of reach for many first-time buyers.
Investors have focused most of their purchases on African-American communities, pricing out families, many of whom end up renting from the same companies and facing poor conditions, exorbitant fees and frequent evictions.
While investor purchases represent a modest portion of the overall market, they are often concentrated in smaller areas where they have excessive influence.an AJC survey found.
Overall, sales have cooled somewhat since spring 2022. But home sales to cash buyers accounted for a significantly larger share of sales over the past two years.
Generally, buyers with cash offers have an advantage, in part because they can often outbid competitors. But without a lender's approval, a cash buyer can often ignore inspections and other conditions that can get in the way of a purchase.
At the national level, last year more than a third of purchases were made in cash.
Contact: Natrice Miller / Natrice.Miller@ajc.com
Contact: Natrice Miller / Natrice.Miller@ajc.com
The trend was driven by a number of factors: hedge funds and other institutions looking for reliable investments, the flow of wealth from boomer retirees to younger generations and higher borrowing costs.
"It's the rates that drive people to use cash," said Querteria Kinnebrew, real estate broker and general manager of Village Premier Collection. "They just don't want to deal with higher mortgages."
Individual cash buyers
Mortgage rates have more than doubled since mid-2021, inflated by a number of factors, starting with the Federal Reserve's campaign to raise the cost of short-term borrowing. And while mortgage rates fell from a peak of over 7% last fall, they rose again last month.
Both regular real estate buyers and investors are sensitive to rates.
"I saw the hedge fund guys back off in the fall when mortgage rates went up," says Torrence Ford, owner of Re/Max Premier. – Many of them contacted again in January.
That could change again: rates have risen and now average nearly 7%, according tobanktarief.
In general, most cash buyers are individuals themselves, says John Hunt, director of MarketNsight, which tracks real estate in the region. Southeast.
To buy with cash, people invest in pension funds, reuse profits from the sale of businesses or shares, or take money from the sale of their previous homes. And not every investor is a hedge fund.
"We think that people buy, renovate and sell it. That's not a bad thing, that's a good thing," Hunt said, speaking at the Georgia State Center for Economic Forecasting's quarterly conference.
For individuals, the money often comes from equity in a home they already own.
At the height of the housing bubble, the average seller lived in their home for less than a year, according to Attom. This meant that many sellers had built up virtually no equity in the property they left behind, so they could walk away with relatively little money.
But that didn't make much of a difference when it came to buying their next home, as no down payments were often required at the time and loans were easy to come by.
In contrast, in the last quarter of 2022, the average Atlanta home seller had lived in the home for 4.2 years. In those more than four years, the average value of the house increased by about 30 percent, he saysan intermediary. com.
This helps younger, ambitious buyers become beneficiaries of the generational transfer of wealth.
Zasluge: Jason Getz / Jason.Getz@ajc.com
Zasluge: Jason Getz / Jason.Getz@ajc.com
Homeowners who live in their homes have more than doubled median prices in metro Atlanta for a decade. Older owners can therefore come up with a good amount of cash - by selling or taking out a loan with their equity as collateral.
That leaves boomer parents, who may have savings and stock portfolios — as well as home equity — to finance young adults who don't have the savings for down payments or the credit score to justify a loan.
"Mom just bought a house in town for her daughter," Kinnebrew said. “It was $265,000. She paid in cash."
Since the Sunbelt is a major destination for many people selling homes in higher-end business regions, many cash purchases come with the move.
In February, the AJC published American Dream For Rent, a multi-part study of the purchase of single-family homes by major investment firms, finding that such firms bought more than 65,000 homes in metropolitan Atlanta and turned them into rental properties. An AJC analysis found that cash-paying Wall Street investors are putting homeownership out of reach for many first-time buyers. Deep-pocketed investors have focused much of their buying on African-American communities, praising families, many of whom end up renting from the same companies and facing poor conditions, exorbitant fees and frequent evictions.
"People are still moving here," says Ford, owner of Re/Max Premier. "It seems like every Uber I get in, the driver just moved to Atlanta."
That change is helping boost Atlanta's luxury market, he saidRoodvin, a national brokerage.
Atlanta was one of the leaders in luxury home supply in the country last year and one of the few metro areas where luxury home prices rose.
But many cash purchases are the result of domestic cash flow from older homeowners to younger and poorer wannabes.
A woman who was recently referred to him is looking for a home, Ford said. "Her grandmother died and left her money. Then another family member gave her $150,000.
A woman is willing to pay cash for a house up to $600,000.
Large investment firms make home ownership out of reach for many first-time buyers,a survey by the Atlanta Journal-Constitution showed. Private equity firms and public companies have snapped up thousands of single-family homes, turned them into rental properties and bundled them into complex investment vehicles.
READ THE SERIES
The American rental dream: Investors are chasing individual homebuyers. Metro Atlanta is ground zero for business purchases, trapping families in rents.
Investors target black neighborhoods. Buy-to-rent pressure is pushing homeownership out of reach in metropolitan Atlanta.
Why business purchases have taken off. The crisis opened the door for business expansion
Investors beat tenants with fees, evictions: Private equity is making a big move in single-family homes in metro Atlanta
Investors' houses lead to tension in the neighborhood: Homeowners in suburban Atlanta clash with companies that buy and build single-family homes
Capitol ignores oversight amid housing crisis: National legislation blames local government, not investors, for rising prices
About this research
PODCAST
Georgia Political Podcast:As part of the American Dream for Rent study
MORE COVERAGE
February 28, 2023:Georgia lawmakers advance housing rights bill
March 2, 2023:Georgia House passes bill to limit local housing moratoriums
March 14, 2023:Cash buyers accounted for more than half of metropolitan Atlanta home sales by 2022
MY
Bill Torpy (February 15, 2023):Big money helps create a dystopian tenant class
Home sales in Metro Atlanta in numbers
Metro Atlanta, share of cash income
2020.:25,9%
2021.:53,7%
2022.:53,5%
Metro Atlanta, equity sales to investors
2020.:7,0%
2021.:21,1%
2022.:19,0%
Full cash share, United States
Highest: Augusta, 72.1%
National average: 36.1%
The median retail price of a home sale in Atlanta
February 2023:399,945 dollars
February 2022:391,495 dollars
February 2021:359,900 dollars
February 2020:320,000 dollars
Metropolises with the highest share of customers who pay entirely in cash
Augustus: 72,1%
Columbus: 69.0%
Athens: 60.6%
Flint, Michigan: 59,5%
Gainesville: 58,9%
Detroit, Michigan: 58,8%
Naples, Florida: 58,2%
Macon: 57,1%
Atlanta: 53,5%
Youngstown, Ohio: 51,5%
Metropolises with the largest share of investor purchases
Atlanta: 19,0%
Memphis: 18,4%
Jacksonville: 17,9%
Charlotte: 16,8%
Tucson: 16,6%
Phoenix: 14.9%
Indianapolis: 14,5%
Lakeland-Winter Haven, Florida: 14,2%
Winston-Salem: 13,3%
Dallas-Fort Worth: 13,2%
Sources: Attom, Redfin,an intermediary. com
FAQs
What percentage of Americans pay cash for a house? ›
Nearly one-third (30%) of U.S. home purchases this year were paid for with all cash. That's up from 25.3% during all of 2020 and represents the largest share since 2014, when 30.6% of homes were purchased with all cash.
Why are investors buying up all the houses? ›“Investors piled into the housing market in 2021 due to rock-bottom mortgage rates and surging housing demand, and are now retreating amid projections that home prices have room to fall,” the report said.
Is the housing market going to crash in Georgia? ›We're not seeing any major home price decline or crash in the Georgia housing market just yet. There are certain factors that suggest that the market may remain strong. Georgia has a robust and diverse economy with industries such as logistics, film, and technology, which have been growing rapidly in recent years.
Is Atlanta housing market slowing down? ›In Georgia, metro Atlanta ranked No. 26 among 100 metros. The report showed tech hubs are among metros where the housing market is slowing at a more accelerated pace than the rest of the country.
Why are so many people paying cash for houses? ›No Mortgage Payments, Interest Or Other Fees
Paying in cash means you get to skip the mortgage process and all the costs and fees that come with it, including interest rates or mortgage insurance. Skipping out on interest can save you a lot of money in the long run.
Just how minimum is up for debate among financial experts. Danielle Miura, CFP, the founder and owner of Spark Financials, suggested, “You should keep enough money on hand to get you a couple of gallons of gas, pay for a delivery tip, or to help in unfortunate events,” or around $100-$200 at a time.
What are the most homes bought by investors? ›Still, single-family homes remain the most popular property type among investors, representing 69.6% of investor purchases in the fourth quarter.
Who owns the most houses in the US? ›John Malone is the largest private landowner in the United States. Malone made his fortune as a media tycoon, building the company Tele-Communications, Inc, or TCI, and acting as its CEO before selling it to AT&T for $50 billion in 1999.
How many US homes are owned by investors? ›According to data reported by the PEW Trust and originally gathered by CoreLogic, as of 2022, investment companies own about one fourth of all single-family homes. Last year, investor purchases accounted for 22% of American homes sold. This is significantly down from the 80% number in 2020-2021, why is this?
Will the housing market crash in 2023 in Georgia? ›Some experts predict that due to low inventory, home prices won't drop in 2023. While others believe that due to the higher interest rates, sellers will lower their prices to current levels. Home values are expected to go down by 5% to 10% due to unaffordability.
Will housing market crash in 2023? ›
Demand for homes remains high, and there are fewer home sellers than there were in 2022. And while the market is cooling, experts don't expect an actual housing crash or a housing bubble burst in 2023. Will there be a housing market crash in 2023? It's highly unlikely that the housing market will crash in 2023.
Is Atlanta a good housing market? ›The National Association of Realtors rates metro-Atlanta as one of 2023's most affordable places to buy a home in the nation. The inventory level is growing faster here than most metro areas while the job market means more people here can afford a home.
What is the average price of a house in Atlanta metro area? ›The average Atlanta home value is $376,284, up 0.6% over the past year and goes to pending in around 19 days.
What is the median home price in Atlanta metro area? ›The median home price in Atlanta was $350,000 in January 2023, according to the U.S. News Housing Market Index, based on Redfin data. That's a 1.5% increase from a year prior. It's also in line with the national median existing-home sale price in January, which was $359,000, per the NAR.
Are house prices falling in Atlanta? ›According to the Georgia MLS, the median sales price of an Atlanta home was $370,000 in Dec. 2022, a 2.8% increase from the previous year. The U.S. Census reported that the median household income in Atlanta was $69,164 from 2017 to 2021.
Why are homeowners pulling cash out of their homes? ›Remodeling or Renovating Your Current Home
In fact, this is one of the most common reasons why homeowners in California use cash-out refinancing in the first place. They do it to cover the cost of renovation or remodeling projects.
A good reason why you may want to offer below 5% is when you're paying with cash (although companies who offer sellers cash for their home will typically offer 65% below market price).
Is the IRS notified when you buy a house? ›The law demands that mortgage companies report large transactions to the Internal Revenue Service. If you buy a house worth over $10,000 in cash, your lenders will report the transaction on Form 8300 to the IRS.
Where is the safest place to keep cash at home? ›Where to safely keep cash at home. Just like any other piece of paper, cash can get lost, wet or burned. Consider buying a fireproof and waterproof safe for your home. It's also useful for storing other valuables in your home such as jewelry and important personal documents.
Should you keep a stash of cash at home? ›Money stashed at home also runs the risk of being stolen. In spite of these concerns, Roberts noted that money experts recommend having an emergency cash stash at home in case there is a need to evacuate, when banks are closed or there is a power failure and ATMs won't work.
What is a good amount of cash to have on hand? ›
While you're working, we recommend you set aside at least $1,000 for emergencies to start and then build up to an amount that can cover three to six months of expenses. When you've retired, consider a cash reserve that might help cover one to two years of spending needs.
Are most millionaires real estate investors? ›“90% of all millionaires become so through owning real estate.” This famous quote from Andrew Carnegie, one of the wealthiest entrepreneurs of all time, is just as relevant today as it was more than a century ago. Some of the most successful entrepreneurs in the world have built their wealth through real estate.
Who makes the most money in the housing market? ›Real Estate Broker
A real estate broker is permitted under law to negotiate and organize real estate dealings. A career as a real estate broker is one of the highest paying and lucrative professions in the real estate industry. On average, experienced brokers take home a six-figure pay.
The latest report from the National Association of Realtors found that baby boomers are now the largest generation of homebuyers, beating out millennials for the first time in years. Combined, younger boomers (ages 58 to 67) and older boomers (ages 68 to 76), made up 39% of homebuyers in 2022.
What percentage of homeowners have no mortgage? ›Yet no-mortgage owners in California are only 33% of all homeowners – and only four places have a smaller share: D.C. at 24%, Maryland at 28% and Colorado and Utah at 30%.
How many homes does the average millionaire have? ›The world's richest people owned on average about four homes in 2022.
What family owns the most land in the US? ›The 2022 Land Report 100, compiled each year by The Land Report magazine, released its annual list of landowners who own the most acres in the United States. The nation's largest private landowners are the Emmerson family in California who own over 2.4 million acres.
Why is Black Rock buying up homes? ›If the company has borrowed money to purchase the house, it can build equity over time, essentially increasing the percentage of the home it owns outright and can then borrow against later on. 2. They can turn the home into a rental property. In addition to building equity, the company can create a new income stream.
What percentage of the US population owns a home? ›Top Home Ownership Statistics In America: 65.8% of Americans own a home as of 2022. Some 74 million Americans, or about 27%, live in a condo or HOA property. 58.4 percent of the housing units were owner-occupied.
What percentage of US homes are owned by corporations? ›Large institutions owned roughly 5% of the 14 million single-family rentals nationally in early 2022, according to analysts.
Will rent go down in 2023 Georgia? ›
While there's no consensus on what rents will do exactly in 2023 — go up a little, go down a little, or stay flat, according to three forecasts — what's clear is they are expected to return to more normal growth patterns, instead of the unsustainable, record rates seen in 2021 and 2022.
Is buying a condo in Atlanta a good investment? ›Atlanta property appreciation rates in the latest quarter were at 6.44%, which equates to an annual appreciation rate of 28.36%. Property values have risen by 15.25% in the last twelve months, making a good fortune for short-term investors in Atlanta.
Will the housing market crash in 2024? ›With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024.
Should I sell my house before the market crashes? ›Before a recession hits, home prices are typically at an all-time high. This means that selling your home before a recession will result in a higher profit between the purchase price of the real estate and the sale price, which can increase your capital gains taxes.
What is the best day to close on a house? ›This delay in itself will not cost you extra money, but if the 3-day delay pushes the repayment of the old loan too close to the weekend, you could end up with a longer overlap in interest payments. You will ideally want to sign your documents on a Tuesday or Wednesday to avoid this issue.
Will the housing market crash in 2023 or 2024? ›Despite the fact that there are some troubling trends in the housing market, we're likely not going to see a crash in 2023 or 2024. While house prices are likely to drop, demand for housing caused by America's ongoing housing shortage is likely to keep prices relatively stable.
What is the best time of year to sell a house in Atlanta? ›| Selling objective | List month | Close month |
|---|---|---|
| Best time for a higher price | March | June |
| Best time to sell fast | May | August |
New housing data shows potential home buyers in Atlanta have fewer options to own a home In 2021, the Atlanta Realtors Association said the average sales price for a home was $378,000. Now, it's $445,000.
Is buying a house in Atlanta a good investment? ›ATLANTA - According to economists at the National Association of Realtors, the metro Atlanta area is the best possible place to buy a house in 2023 based on a variety of factors. That's good news for prospective home buyers, but may also be good news for home sellers as well.
What is a comfortable salary to live in Atlanta? ›As of May 16, 2023, the average annual pay for the Comfortable jobs category in Atlanta is $35,151 a year.
What is the most expensive part of Atlanta? ›
1. Tuxedo Park. Tuxedo Park is the richest neighborhood in Atlanta. Situated in north-central Buckhead, Tuxedo Park was originally a series of woods and farmland in the early 20th century.
How much money do you need to live comfortably in Atlanta? ›| 1 ADULT | 2 ADULTS (1 WORKING) | |
|---|---|---|
| 0 Children | 1 Child | |
| Required annual income after taxes | $33,290 | $61,314 |
| Annual taxes | $6,085 | $10,840 |
| Required annual income before taxes | $39,375 | $72,154 |
For decades, the overall cost of living and availability of cheap land has caused real estate in metro Atlanta to be more affordable than in other major cities. The city has no natural boundaries. But a recent study claims to show that it is now smarter to rent in metro Atlanta than it is to buy - at least for now.
Is Atlanta considered medium cost of living? ›The cost of living in Atlanta, GA is 14% higher than the state average and 2% higher than the national average. Atlanta, GA housing is 8% more expensive than the U.S average, while utilities are about 14% less pricey.
Why Atlanta tops the hottest 2023 real estate markets? ›The city, dubbed the “New York of the South,” rose to the top of NAR's list of markets to watch in 2023 for three main reasons: Atlanta has greater housing affordability than comparable cities, its population is growing more rapidly and 20% of renters there can afford to buy a median-priced home—higher than the ...
How many Americans buy houses in cash? ›Last year, nearly a third of U.S. homes were purchased with cash, according to data provided by the realty company Redfin. That's an 8 percent increase from 2021, continuing a trend that started during the pandemic.
What is the average house payment in USA? ›Data from the Council for Community and Economic Research (C2ER)'s 2022 Annual Cost of Living Index shows that the national average monthly mortgage payment is $1,768. This figure differs from the median monthly payment in the U.S., which is $1,532.
What percentage of wealth is cash? ›Cash and cash equivalents can provide liquidity, portfolio stability and emergency funds. Cash equivalent vehicles include savings, checking and money market accounts, and short-term investments. A general rule of thumb is that cash and cash equivalents should comprise between 2% and 10% of your portfolio.
How much cash should I have on hand for a house? ›Different lenders have different requirements about how many months' payments you'll need in your account. Most lenders require at least two months of cash reserves if you are applying for a conforming mortgage loan. However, the requirement can be as much as 24 months for higher-priced homes.
What cities have the most cash buyers? ›
- Athens, Georgia (60.6%)
- Flint, Michigan (59.5%)
- Gainesville, Georgia (58.9%)
- Detroit, Michigan (58.8%)
- Naples, Florida (58.2%)
- Macon, Georgia (57.1%)
- Atlanta, Georgia (53.5%)
- Youngstown, Ohio (51.5%)
According to data reported by the PEW Trust and originally gathered by CoreLogic, as of 2022, investment companies own about one fourth of all single-family homes. Last year, investor purchases accounted for 22% of American homes sold. This is significantly down from the 80% number in 2020-2021, why is this?
Do billionaires buy houses in cash? ›Here's why rich people don't buy properties free and clear
The simple reason why most rich people do not pay cash for properties is that they can make a better investment with their money elsewhere rather than putting a large sum down on a home. * Points are equal to 1% of the loan amount and lower the interest rate.
Monthly payments for a $250,000 mortgage
On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 4%, you'd pay $1,193.54 per month for a 30-year term or $1,849.22 for a 15-year one.
In the U.S., the free-and-clear homeownership rate was 23%.
What of Americans own a home by age 65 and over? ›Homeownership rate in the U.S. 2021-2022, by age
About 39 percent of the people in this age group owned a home during this period. In contrast, almost 79.5 percent of those aged 65 and older owned their home. The homeownership rate is the proportion of occupied households which are occupied by the owners.
People with the top 1% of net worth in the U.S. in 2022 had $10,815,000 in net worth. The top 2% had a net worth of $2,472,000. The top 5% had $1,030,000. The top 10% had $854,900.
What bank do millionaires use? ›Citi Private Bank is the private banking department of Citibank. Their services are reserved for worldly and wealthy individuals as well as their families. While eligible clients can get deposit accounts and retirement accounts as you'd find at any other bank, there are also many specialized products and services.
Do millionaires hold cash? ›High net worth investors typically keep millions of dollars or even tens of millions in cash in their bank accounts to cover bills and unexpected expenses. Their balances are often way above the $250,000 FDIC insured limit.
What is a good cash on cash for real estate? ›What Is A Good Cash On Cash Return? There is no specific rule of thumb for those wondering what constitutes a good return rate. There seems to be a consensus amongst investors that a projected cash on cash return between 8 to 12 percent indicates a worthwhile investment.
Is it smart to keep cash at home? ›
It's a good idea to keep a small sum of cash at home in case of an emergency. However, the bulk of your savings is better off in a savings account because of the deposit protections and interest-earning opportunities that financial institutions offer.