While shopping in an historically difficult housing market for homebuyers, a theme has emerged: A cash offer can get you over the top in a crowded field.
Buyers are increasingly winning homes with cash across the country. As bidding wars have broken out for the limited number of available homes for sale in the U.S., those who come with cash are more likely to win now than before the COVID-19 pandemic — a seismic societal shift that further exacerbated the existing housing squeeze.
For home sellers, a cash offer is often preferred over an offer backed by a loan. Mortgages can fall through, appraisals take time — and cash is right there, ready for the taking. With the market this hot, there’s less reason than ever for sellers to deal with contingencies, red tape, and other holdups.
The numbers bear this out: In an analysis of winning bids on single-family homes in 2019 vs. 2022, Orchard found that the percentage of homes sold for cash, as well as the total number of homes sold for cash, rose significantly in some of the country’s hottest housing markets.
Orchard operates in each of these markets, and has found that winning bids in all of them are now more likely to involve a cash offer. (Portland's increase was less than one percent.) In Atlanta and Charlotte, the winning offer is now made in cash more than a quarter of the time. Cities such as Denver, Dallas-Fort Worth, and Austin also saw notable increases in the percentage of winning cash offers.
See the full numbers for each market below:
This upward trend in cash offers is even more impressive when you consider that median home sale prices have reached record levels.
Many home buyers don’t have the capital to compete in such a crowded, cash-friendly market, especially when going up against real estate investors and workers moving in from higher cost-of-living cities and states. This has led to the development of power buyers, like Orchard, which aim to level the playing field. These companies can put up their cash on your behalf whether you’re a first-time buyer or selling and buying your home at the same time.
For this report, Orchard compared the number of single-family homes sold to cash buyers against the total number of single-family homes sold in two time frames: January-May 2019 and January-May 2022. Percentages are rounded to the nearest whole number. These numbers come from the MLS in each market analyzed.
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