If you’ve been looking on the South Florida market for some time you are probably no stranger to the ‘cash buyers’ sale’. It’s a person who purchases a home without the help of a loan.
A new report by Redfin shows that in 2024, 32.6% of homes were purchased with cash, its lowest level since 2021, while the number of homes sold for cash fell to 700,455, the lowest in a decade.
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WATCH HERE“The reason behind this trend is that investors are buying fewer homes right now. The returns to investing real estate are a little lower than they were previously and larger because rents have been largely flat in this country,” said Chen Zhao, Head of Economics Research at Redfin.
But the story is different in Florida.
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That same report found that the metropolitan areas in Florida had the highest share of cash homebuyers. West Palm Beach at almost 50%, Fort Lauderdale close to 40%, and Miami more than 38%.
“It’s a place where a lot of wealthy people buy homes, and a lot of times when wealthy people buy homes, they tend to be able to pay with all cash. A second piece is that there is a lot of investor activity in Florida. And sometimes investors tend to not want to finance their properties, and they are able to purchase with all cash,” said Zhao.
To put it in perspective, the median price of a home in the West Palm Beach, Miami, and Fort Lauderdale area was $650,000 in January, according to a report of the Florida Association of Realtors.
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WHO ARE THE BUYERS?
Jonathan Lickstein, President of Broward, Palm Beaches and St Lucie Realtors, says South Florida has always been an investment hotspot for flips, vacation rentals and relocating.
“What we saw from the pandemic coming forward, was a big trend of people selling their homes in the Northeast or other places that had higher evaluations and leveraging those equity to then take that, turn it in down here,” he said.
That means “taking the equity from a condo, a loft in Manhattan, and taking that into a single family home, with a bigger space, and higher living quality in South Florida.”
And Lickstein said those buyers aren’t retiring but looking for more. Some are Americans but a large portion are international buyers.
According to a 2024 profile of international buyers, Argentinians and Colombians accounted for 32% of all South Florida international closed sales.
In Broward, Colombians top the list, in Miami-Dade it’s Argentinians.
“People within these other countries don’t want to devalue their currencies so they are moving their money over here, they are buying real estate, which is a great hedge against inflation, which is what we are seeing right now. Believe it or not i am working with a lot of Brazilian firms that are looking to relocate here to South Florida and be able to do development projects and cater to that clientele that is looking to transfer their wealth here to South Florida,” said commercial real estate broker Bryan Gorrita.
Both experts believe that cash buy sales will remain strong in the short term in the Sunshine State but there are various factors that could impact its progress.
The first one is the number of homes available, with a lot of inventory right now. followed by the price of construction and the price of insurance.
But there’s another factor that could change ‘who’ is making these cash offers.
“The people we are seeing now are the C-suite executives, these are the young professionals, but the real ones that are going to change the market are the families. And those are still in Chicago, New York, San Francisco,” said Gorrita.
Gorrita says if more desired options and prices become available, the demographics of South Florida could also change.
However, if you’ve got the money other experts say take advantage.
“I think 2025 is a really god time to buy and a soft spot in the market, you have a lot of negotiability as a buyer and a lot of options with the amount of inventory,” said. Lickstein.
As for Redfin, they believe the future for cash buyer sales in 2025, both in Florida and on a national scale, will look pretty similar to what we saw in 2024.
