Real estate agents say cash buyers include baby boomers downsizing to Boston condominiums with profits from the sales of their suburban houses, well-off parents purchasing homes for college-age children, and investors seeking discounted properties they can rent or sell.
They are turning to cash for various reasons, including tighter lending guidelines that have made mortgages less attractive, dwindling bank financing for investment properties, and a volatile stock market that has sent people looking for other places to put their money.
The Massachusetts cash purchase trend is in line with national numbers. Across the nation, about 31 percent of all August home sales were in cash, the second highest percentage since February, when it reached nearly 34 percent, according to a survey by the Maryland-based trade publication, Inside Mortgage Finance.
Inside Mortgage Finance publisher Guy Cecala said investors - buyers who are not purchasing properties as their personal residences - are largely resorting to cash because lenders consider such deals too risky to finance in a stagnant real estate market. Other buyers, he said, believe buying a house at today’s lower prices is preferable to taking a chance on stocks. “They don’t have a better use for the money,’’ Cecala said.
Roxbury, downtown Boston, and Cambridge are at the top of the list of areas with the highest percentages of mortgage-free deals. Recent cash closings in Boston included the sale of former Red Sox player Manny Ramirez’s $5.6 million condo at the Residences at the Ritz-Carlton Towers, a $5.4 million condo deal at the Mandarin Oriental, and a $3.4 million sale of a Beacon Hill penthouse, public records show.
