WASHINGTON — Home sales are starting to tick up after the worst year in more than a decade. But the momentum is coming from cash-rich investors who are scooping up foreclosed properties at bargain prices, not first-time homebuyers who are critical for a housing recovery.
The number of first-time buyers fell last month to the lowest percentage in nearly two years, while all-cash deals have doubled and account for one-third of sales.
A record number of foreclosures have forced home prices down in most markets. The median sales price for a home fell last month to its lowest level in nearly nine years, according to the National Association of Realtors.
Lower prices would normally be good for first-time homebuyers. But tighter lending standards have kept many from taking advantage of them. With fewer new buyers shopping, potential repeat buyers are hesitant to put their homes on the market and upgrade.
Cash-only investors are most interested in properties at risk of foreclosure. They can get those at bargain-basement prices.
“The cash-rich investors can come in and get foreclosed properties at incredibly favorable prices,” said Paul Dales, senior economist for Capital Economics. “The average Joe can’t take advantage because they simply cannot get the credit to buy.”
Sales of previously occupied homes rose slightly in January to a seasonally adjusted annual rate of 5.36 million, the Realtors group said Wednesday. That’s up 2.7 percent from 5.22 million in December.
In Las Vegas, existing-home sales increased to 3,785 in January, up 3 percent from the same month a year ago, but down from 4,455 in the previous month, SalesTraq research firm reported.
SalesTraq reported 1,424 real estate-owned, or bank-owned, sales in January at a median price of $105,000. That brought the overall Las Vegas median down to $109,000, the lowest since 1991 and a 9.2 decrease from a year ago. Half of the homes were purchased with cash, and more than three-fourths were vacant.
Las Vegas Review-Journal writer Hubble Smith contributed to this report.