Cash is king in red-hot Portland real estate
Cash is representing a full one-third of single-family home sales last year. No loans, no mortgage, but purchases paid in full with cash.
Like many cities, Portland is facing pent-up demand by buyers who hunkered down through the recession. Limited supply, new residents, and uncertain sellers also are strong market factors.
But an InvestigateWest analysis shows Portland’s affordability also is being pressured by investors so bullish on this city’s single-family housing they’ve bought properties by the dozen on the heels of the recession, driving up prices and rents as they go.
One company, American Homes 4 Rent, exemplifies the trend. The company purchased significant portions of property in communities hit hard by foreclosure before coming to Oregon in 2013. It has since sold hundreds of millions of dollars in bonds to investors, backed by single-family rentals. Other companies designed to generate profits for investors involved include Equity West Capital Partners, a California-based private equity firm that has purchased dozens of Portland-area homes to flip. Dilusso Homes and Portland Development Group, both local remodelers and developers, similarly take cash from private investors in exchange for returns on their deals.
In the greater Portland area (Portland, Vancouver and Beaverton), such institutional investors bought 6,103 properties between 2011 and the end of 2014, according to data from the real estate information company RealtyTrac. That was nearly 14 percent of all cash sales in the area. And as foreclosures slow, those investors have started to move in on the traditional housing marketplace to compete with the likes of the Buris. The InvestigateWest analysis found 26 institutional investors competed regularly in the listed marketplace, where people in search of their own home typically shop.
What this means for you
In a buying scenario, cash buyers are given preference over those buying with finance because finance deals run the risk of falling through, thus making it more difficult to buy a house. On the other hand, as a seller in this climate, a hot property has the opportunity for higher gains, driving up prices among competing buyers. Contact a professional today for help marketing your home to not miss this unique opportunity!