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Still a lot of cash buyers in the housing market

There's a lot of cash chasing real estate deals: One in five homes changing hands in the Baltimore region in July wasn't paid for with a bank loan.

Such transactions are an indicator of real estate investment activity, and the share has remained high even as more traditional buyers venture back into the market -- and even though the number of foreclosures for sale is far below the supply a year or two ago.

All told, 460 homes in the Baltimore metro area were bought entirely with cash in July, according to RealEstate Business Intelligence data. That's about as many as in July 2011, though the percentage slipped from 21 percent to 20 percent as overall sales ticked up.

Compare that to July 2005, the height of the housing bubble, when cash deals were just 9 percent of the market. There were both fewer of them and a lot more overall sales. And even though real estate investors and wannabes were snapping up homes right and left, many were going the mortgage or home equity route because financing was so very easy. (Then came the bust.)

Cash deals pop up everywhere in the region, but they're especially common in Baltimore. For a while last year, they accounted for more than half the city's home sales. In July, they were a slightly more modest 39 percent.

If you're a regular ol' buyer with financing lined up, going head-to-head with a cash purchaser can be frustrating. When an investor offers the same amount you did or even close to it, the seller might go with that contract under the assumption that it will settle more quickly -- or just to avoid the possibility that your bank will throw up a hurdle that nixes the deal entirely.

But if you're looking for a home in good condition, there's less chance you'll run into a cash-only buyer. An investor, anyway. Some homeowners who downsize end up with enough cash from the sale of their old place to cover the new purchase price completely.

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