RealtyTrac: All Cash Sales Up During Q1

The research firm says about one-third of all properties purchased in the state between January and March went to cash buyers.

“The 33.3 percent of all sales in cash was the highest level we’ve seen since we started tracking this back in 2011, says RealtyTrac's Daren Blomquist. He says all-cash sales were up 4 percent from the previous quarter and up 13 percent from the same period last year. But Blomquist predicts the upward trend will reverse itself based on preliminary second quarter numbers.

“We are going to see cash sales start to go down, turn the corner and go down, as a percentage of all sales because there’s a limit to the pool of people who can actually afford to buy with cash,” says Blomquist.

Meanwhile, institutional investors, or companies that buy at least 10 properties in a calendar year, accounted for 2.5 percent of all California home sales in the first quarter, down from just over 5 percent the previous quarter.

In the Sacramento area, nearly 33 percent of residential property sales in the first quarter were all-cash purchases. That's up about 10 percent from a year ago. Cash buyers include: individual investors, second-home buyers and owner-occupant buyers. Meanwhile institutional investors, or companies that buy at least 10 properties in a calendar year, accounted for just 4 percent of purchases in the first-quarter.

"The institutional investor share was down from a year ago when it was 8.8 percent of sales represented by institutional investors," says Blomquist, "so that's been cut in half as the Sacramento market dries up in terms of that lower end inventory that the institutional investors really like to look at."

Blomquist says institutional investors will keep pulling back on purchasing in the Sacramento area as home prices continue to appreciate.