Cash Sales Are Beating Out FHA-Backed Sales In Today’s Market

ccording to the National Association of HomeBuilders’ study of the U.S. Census Bureau’s Quarterly Sales by Price and Financing more homes were purchased by cash in the third quarter of 2022.  This is the first time a cash sale has beat out an FHA loan since 2007.  The share of cash purchases climbed 9.5% to a 20-year high which amounted to 14,000 sales. 

New home sales through the Federal Housing Administration (FHA) came in only at 11,000 sales which was 7.5% of the total sales in the third quarter of 2022.  The share has dropped close to two-thirds since spring of 2020.  Conventional loans made up 77.6% of new home sales in the third quarter of 2020 while VA loans declined to 5.4%.

The national median sales price of a new home was $454,900 in the second quarter of 2022.  This was a 5% increase but there is still a big difference in the type of financing percentages.  New home sales with all-cash increased 27.3% since the beginning of while FHA-backed sales have decreased 7.6%.  The median prices varied for new homes by the type of financing, conventional $503,200, FHA, $340,300, VA $432,200 and cash $494,200.

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Two Important Factors a Home Inspector Notices In a Bathroom

 A homebuyer always looks at the style and upgrades of a bathroom when touring a listing. A home inspector looks for two things, safety and water. A home inspector always has the worst scenario in mind and the bathroom tends to be where one would occur. The Centers for Disease Control and Prevention did a study that showed in 2008 emergency department doctors treated 234,094 non-fatal injuries that occurred in the bathroom.

“There are so many ways to be injured: slipping on wet tiles, scalding water that is too hot, and electrical shock from improper wiring are all common occurences,” Welmoed Sisson, a certified home inspector says.

The water coming from the faucets in a bathroom should never go over 120 degrees out of the sink and 106 degrees in the bathtub. Other issues that will be noted are cracked tiles with sharp edges, loose toilets, poor clearance, loose grab bars, small shower doors and non-tempered shower door glass. Another potential hazard can be the electrical outlets. A home inspector will make sure there are GFCis located in the bathrooms. A ground fault circuit interrupter will protect against electrical shocks.

Water can cause a damp environment which is not a good sign in a bathroom. This can cause thousands of dollars in repairs. A home inspector will look for gaps between tiles and missing caulk around bathroom fixtures. They will also look underneath the sink to make sure the drain is plumbed correctly.

“Many people assume that a bathroom is waterproof-it’s not. It’s water-resistant. Water is persistent and will find any available opening to flow into. Any tiny gap in caulking or grout can lead to massive amounts of hidden damage to the framing inside the walls,” she says.

Another thing is to make sure the base of the toilet is secure and there is no softening of the floor. The softening of the floor can indicate water damage. They also want to make sure the toilet does not shimmy.

“It should not move at all. Any movement could indicate a weakening of the seal at the floor, which can lead to leaks,” Sisson states.

Remember if you are looking for a new home, make sure to not just look at the aesthetics in the bathrooms, but the caulk and grout condition as well. Home inspectors warn that buyers get distracted by things such as trendy light fixtures and upgrades.

“They should get up close to the walls and floors, looking for signs of poor maintenance,” Simmons suggests.

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Is the Artificial Real Estate Market Over?

 Stephanie Vitacco, a real estate broker with Equity Union, says that the artificial housing market is over. During the past two years there has been an artificial market, and we have gotten spoiled by this. The bidding wars are over and buyers should “get picky again.”

As the interest rates begin to rise, the homebuying market is slowing down. The market is currently transforming and buyers are slowly getting buying power back. “We were used to getting 10, 20 to 30 offers on a property. Now we’re back to the point where condition matters a whole lot more as well as the floor plan. Buyers are being picky – and they can be picky”, Vitacco said.

According to Redfin this summer a listing spent 19 days on the market which was one day longer than the summer of 2021. “Buyers, who earlier this year had to race to beat the competition, can now take their time touring homes and perhaps even wait to see if sellers drop their price, ” says Daryl Fairweather, Redfin chief economist.

Redfin shows that home prices are falling and less buyers are out there competing for a home. Sellers are now having to lower their home prices and the listings that were selling above asking price decreased. Many professionals in the industry are telling their sellers to price their homes realistically from the start so they will not sit on the market. “The market slowdown is giving buyers more opportunities to negotiate, especially with sellers whose homes have been on the market for a while, ” says Jessica Nelson, a South Carolina real estate agent with Redfin.

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