Cash buyers raising home prices

Posted at 7:07 PM, May 17, 2021
and last updated 2021-05-17 19:07:46-04

LEE COUNTY, Fla. — Two types of people are winning in the real estate market. Sellers and cash buyers. The market continues to ramp up, so much that a Fort Myers home sold for six figures above the original asking price.

A two-bedroom, three bath home in the Palm Acres neighborhood is a hot commodity. It was going for $750,000. The sale is pending as of Monday at $200,000 more than that original price tag.

The seller’s broker Kerry Constantine said she went from filling up back-to-back viewings for the place every 30 minutes in one day to just doing an open house.

“We had so much interest that we needed to try to accommodate as many people as we could,” she said.

She stopped counting how many buyers were interested after 50 and said after 20 written offers, the seller decided to go with with best offer, pushing the current pending sale close to $1 million. That sounds like great news for Constantine and her client, but even she’s concerned about the market.

“Cash buyers are really winning out over anyone who needs to buy something with financing,” said Constantine.

Buyers like Diane Marsch who spoke with Fox 4 back in March, when she was house shopping with her husband Ray.

“We both have been looking non-stop,” she said.

They’ve been looking to buy her first home for a year now and put in 12 offers for different homes.

“People would just come in with cash, and take it from right underneath of us,” she said.

Now, thanks to a $100,000 cash gift from her son Christopher, Marsch lucked up on her 13th offer.

“This is our very first home, yes, and we’re so excited!” she said.

Going back to that Palm Acres home, Constantine calls it an outlier, but pushes buyers to ask their realtors about competing prices for other homes in their desired neighborhood. Another Palm Acres home is slightly bigger than the home that sold for $200K above asking price, and that one sold for right at $700,000 in November. Constantine says the market has accelerated since then. So, check this information constantly.

Finance Professor Tom Smythe at Florida Gulf Coast University says buyers hold the power to cool off the market.

“At some point, buyers will start to back off and say you know, I’m not going to buy at that price. I’m going to wait for things to settle down just a bit,” he said.

He says that’s when demand will retreat and prices will either stay where they are or decline as well.

Marsch is scheduled to close on her new house Wednesday.

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