38% of Sales in King County Were Purchased With Cash in 2011

With a sudden spike this year of reports from our agents in the field that they were coming up against multiple offer situations in which buyers were making all-cash offers, I was curious to know what percentage of homes sold in King County recently were bought with all-cash.

Since any job worth doing is worth over-doing, I decided to pull all financing types for sale in King County dating all the way back to 2000 and visualize it in my fancy new copy of Tableau (an awesome company based right here in Fremont, by the way). The result is the following interactive chart.

Select which type of financing you want to view on the heat map (zero down, 20%+, or all cash), then drag the “Heat Map Year” control to view a zip code heat map for any year. Zip codes where less than 15% of the sales for that year were of the selected financing type are colored in blue shades on the map, while above 15% will show up in shades of red. Float your mouse pointer over a zip code or a point in the chart below to get the details for your selected year.

What I find really interesting about this chart is how closely the sales volume line (brown) and the zero down line (orange) trend to each other over the years. Meanwhile, as the bottom fell out of zero down purchases, the number of all cash sales has been soaring, up from just 12% of the market in 2006 to 38% in 2011. So far 2012 is following the same trend, as well.

What’s driving the big boost in all cash financing? My theory is that it’s a combination of investors taking advantage of low prices and increasing rents and purchases by well-paid tech workers as various cash-flush companies (Amazon, Microsoft, Google, Facebook, etc.) continue to ramp up their hiring.

What’s your theory? If you’ve been out there trying to buy a home today have you come up against competing all cash offers on homes you’ve tried to buy?

  • CuriousGuest

    The map is really slow and buggy. It would nice to see a line for FHA financed as well (>0% and <20%). Has the quantity of all-cash deals increased, or has the percentage risen because overall sales are down?

    • Haybaler

       Based upon discussion and statistics which were reviewed recently over on Seattle Bubble it appears that while All Cash purchases have increased in the Seattle market by about 100% since 2007, at the same time 0 Down purchases have decreased by 90%, and of course Total sales have fallen to about 1/3rd of the peak number of sales.

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  • Hoi Yuen

    my speculation – the stock market is still shaky but it has bounced up a bit, allowing investors to sell their holdings, but it is not a safe place to park their money.  Also more and more boomers are reaching mandatory withdrawal age from their 401K.