Nationwide, the percentage of cash sales for homes has fallen steadily since January 2013, yet the Philadelphia region's share of such transactions appears to be climbing, a report by real estate data provider CoreLogic says.
In the eight-county Philadelphia region in June, the most recent month for which it has data, CoreLogic says, cash sales represented 55.1 percent of all home purchases - 13.1 percentage points higher than the same month in 2014 and well above the nation's 31.3 percent.
Regionwide, there were 6,866 home transactions in June, with a median sale price of $238,000, according to Berkshire Hathaway Home Services Fox & Roach Realtors HomExpert Market Report.
In 2011, during the depths of the real estate downturn, when investors comprised the largest set of buyers in the hardest-hit areas, cash sales represented 46.5 percent of all home transactions nationwide. "Normal" is 25 percent, CoreLogic says.
That year, investors gobbled up more than half the nation's bank-repossessed properties, rehabbing and renting them for positive cash flow, then refinancing the properties and taking cash to buy more of them.
Some investors did "wholesale flipping," as one real estate expert put it, buying the most absolutely discounted properties, performing minor repairs, and flipping to another investor buying 20 cents on the dollar of the last sale price and selling for 50 cents.
In general, however, observers of this region's housing market saw CoreLogic's 55.1 percent figure as too high.
Kevin Gillen, chief economist for Meyers Research and senior research fellow at Drexel University's Lindy Institute for Urban Innovation, said he doesn't believe that cash buyers exist locally in the numbers CoreLogic suggests.
Although there remains a bumper crop of distressed housing, especially in South Jersey, "not only have traditional buyers - with mortgages - gotten back into the market, but the number of investors snapping up distressed properties using cash only has shrunk dramatically," Gillen said.
"I don't see too many cash transactions other than from investors, who will almost always do them," said Carol McCann, of Re/Max Millennium in Fox Chase. When contacted, she noted that she was, coincidentally, "sitting in a cash settlement" with a first-time home buyer in Fishtown.
Still, Philadelphia Realtor Allan Domb said, there might be something to what CoreLogic is saying.
"Many sales that take place are less than $100,000, and to deal with lenders for small loans may not be worth it," Domb said. In addition, "with banks paying 0.10 percent on savings, buyers are using their cash rather than take a bank loan at 4 percent - 40 times the interest the bank pays."
If the buyers are speculators, "the cash is quicker and less than the bank costs," he said.
Jerome Scarpello, president of Leo Mortgage Inc. in Ambler, said that "though cash sales exist, my experience is that most buyers do so with some sort of financing."
"Some may pull equity from their existing home and pay cash, thus resulting in it going on record as a 'cash' sale," he said
CoreLogic's Alexandra Hayes explained that, for data-collection purposes, a cash sale is identified as a transaction for which there is no associated mortgage.
"This logic is only used in geographies where data on both the deed sale and mortgage are collected," Hayes said.
CoreLogic's methodology can identify transactions involving large institutional investors - involving 10 or more properties, she said, "filtering out individual or small investors that are purchasing only a few homes."