In Florida, cash is king when it comes to buying homes. Over a million fewer mortgage loans exist in the state's residential real estate market today compared with several years ago. This is due to foreclosures as well as short sales that occurred while the recession was taking place.
The number of mortgage loans decreased from over four million in 2007's third quarter to a little more than three million during the same time period of 2014. Florida's 25 percent drop in mortgages was the biggest decrease in the United States. In many situations, distressed properties that were foreclosed on in the recession ended up being purchased by people who paid in cash.
Today, about six out of 10 transactions involving real estate involve cash in South Florida. Many individuals who have been buying up property in the state are wealthy individuals from the northeastern part of the United States as well as China and Latin America. It has become more difficult for many local buyers to get mortgages since banks abiding by federal regulations have to demand larger down payments along with lower amounts of debt.
The economy fortunately has been improving, and more people can therefore pay their debts off and put more money down on their future homes when getting mortgages. For those who are interested in selling residential real estate, now appears to be a beneficial time, with more people in a position to buy properties using either mortgages or cash and with prices remaining strong. An understanding of laws related to real estate may help people to complete their deals successfully in Florida.
Source: sun-sentinel.com, "Florida has a million fewer mortgages", Donna Gehrke-White, Dec. 9, 2014