by Calculated Risk on 5/14/2014 04:29:00 PM

From housing economist Tom Lawler:

In a report that got a huge amount of media coverage, RealtyTrac alleged that the all-cash share of home purchases hit a record 42.7% last quarter, up from 19.1% in the first quarter of 2013. This increase was “shockingly” large, and occurred despite a decline in the institutional investor share of home purchases. If correct, it is not surprising that this would be “big news.” In reality, however, they are not ...

Click on graph for larger image.

Here is a chart from RealtyTrac. The blue line is the All-Cash Share.

According to RealtyTrac’s tabulations, the all-cash share of home purchases surged in the third quarter of 2013, and has continued to increase, and last quarter it was more than double the year-earlier share.

Data from other sources, in contrast, strongly indicate that the all-cash share of home purchases has been declining over the last year – not just MLS-based reports (such as the one’s I track, but from another entity (CoreLogic) that uses property and mortgage records.

The RealtyTrac data from 2011 through the second quarter of 2013 show a MASSIVELY lower all-cash share of home purchases than does CoreLogic, or that local MLS data would suggest. CoreLogic, e.g., estimated that the all-cash share of home purchases in the first quarter of 2013 was a tad over 40%, compared to RealtyTrac’s estimate of 19.1%. While I don’t have CoreLogic’s estimates for Q1 2014 yet, I’m pretty sure it will show a drop from the first quarter of 2013 of at least five percentage points. (I’m hoping CoreLogic will send me their Q1/2014 estimates soon.)

Below are some all-cash shares of home purchases for various areas – most based on MLS data, but some based on property records tabulated by Dataquick – for March of this year vs. March 2013.

In looking at both these data and the CoreLogic estimates, how can it POSSIBLY be true that the all-cash share of home sales in the first quarter of 2013 was just 19.1%, or that the all-cash share of home sales in the first quarter of 2014 was more than double that of 2013?

The simple answer is ...it can’t.

	All-Cash Share
	Mar-14	Mar-13
Las Vegas	43.1%	57.5%
Seattle*	22.8%	23.9%
Phoenix	33.1%	41.5%
Sacramento	22.5%	36.5%
Miami*	62.5%	66.6%
Mid-Atlantic	19.9%	20.6%
Orlando	44.6%	55.6%
Bay Area CA*	25.0%	31.0%
So. California*	29.1%	35.1%
Toledo	40.7%	38.9%
Wichita	32.0%	27.9%
Des Moines	20.8%	19.1%
Peoria	21.3%	21.7%
Florida SF	45.5%	48.3%
Florida C/TH	70.9%	74.9%
Tucson	33.5%	35.0%
Omaha	20.3%	22.1%
Georgia***	33.8%	NA
*share of existing home sales, based on property records **Single Family Only ***GAMLS