Toni's May 2024 Newsletter

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Cash Money

Dear Friends and Family,

Starting with the clank of a cash register, one word says it all in Pink Floyd's 1973 hit, “Money”. Over 50 years later, cash is still king. After decades of cheap money and low interest rates, the change of fortunes has cash once again riding high. The U.S. dollar has been a strong reserve of value in real estate, with all-cash deals setting a record in the final quarter of 2023. Cash is exerting a powerful dynamic on the market that may well continue through the year.

Highs and Lows With a record percentage of homeowners locked into low interest rates, there are limited advantages to refinancing. Fearing that their next mortgage will have less favorable terms, many would-be sellers are reluctant to list their homes. Moreover, the combination of low rates and property value increases have led to historic lows in distressed sales and foreclosures at only 2%, further limiting overall inventory.

Cheap Money By locking in low rates, these homeowners gain asset value for years to come and a steady monthly payment. In essence, these households will continue to benefit from the availability of cheap money through a 15-to-30 year mortgage. With new mortgage rates exceeding the average existing rates by over 3%, the appeal and benefits of an all-cash purchase makes economic sense among buyers.

The Benjamins The greenback continues to be the preferred reserve currency with a record amount of currency in circulation. Since 2017 the $100 bill has overtaken the $1 bill as the most circulated note, serving as a store of value rather than something to be spent. Over half of U.S. currency is thought to circulate abroad, with global events shaping foreign demand. Many overseas homes, especially in high-valued areas, are priced in U.S. dollars and the majority of transactions are purchased in cash.

Cold Hard Cash Having so much money floating around, it is little wonder that cash sales are hitting all-time highs. While the bidding wars of the past few years have subsided, limited inventory and elevated rates place a premium on cash. Many of these buyers are investors who see an opportunity in securing assets now that, after rising in value, can be used as collateral when interest rates change.

With record-breaking values and historic movements across real estate, it is important to talk with a knowledgeable broker. I’m always happy to discuss the possibilities, and the industry in general, with clients.

All the best,

Toni Haber
Licensed Associate Real Estate Broker
Founder, Toni Haber Team  |  Private Client Advisors
TONI@compass.com  |  917.543.1999

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Toni Haber

Licensed Associate Real Estate Broker
917.543.1999
toni@compass.com

Office: 646-982-0353

Compass is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.