Since 2019, the share of cash buyers in Southeast Florida's real estate market has been steadily rising. This trend underscores the region's appeal to wealthy buyers, which, in turn, strengthens the housing market and boosts the local economy through housing-related and consumer spending.
Cash Sales Surge Across Counties
From January to May 2024, cash sales in Martin County accounted for 54% of all transactions, up from 40% during the same period in 2019. Palm Beach followed with 47% (up from 35%), St. Lucie with 30% (up from 22%), Miami-Dade with 27% (up from 22%), and Broward with 26% (up from 20%).
In the condominium and townhome market, over half of the sales were cash transactions in all counties. Notably, Palm Beach County saw a significant increase, with cash sales rising from 59% in 2019 to 64% in 2024.
Factors Driving the Increase
Several factors contribute to this rise in cash sales. Higher mortgage rates, sustained property price appreciation due to tight inventory, and an influx of out-of-state buyers with higher incomes all play a role. Additionally, substantial home equity gains, particularly among movers from high-priced states like New York, California, and Massachusetts, and the financial wealth of retiring Baby Boomers have driven this trend.
The COVID-19 pandemic also accelerated Baby Boomers' retirement, attracting them to Southeast Florida's coastal lifestyle. The lifting of COVID travel restrictions in 2023 further spurred international migration and travel, bolstering foreign buyer transactions, 66% of which are cash sales.
Comparison to Post-Great Recession Period
Although the share of cash sales has increased since 2019, it remains lower than the levels seen immediately after the Great Recession when investors actively purchased foreclosed or short-sale homes.
Dominance in the Million-Dollar and Low-Price Segments
Cash buyers dominate both the million-dollar market and the lower-price segment (under $300,000). In the million-dollar market, cash buyers include wealthy individuals purchasing primary residences, vacation homes, or luxury rental properties.
From January to May 2024, cash sales made up about 70% of single-family home sales priced at $1 million or more in Martin (71%), St. Lucie (70%), and Palm Beach (69%). In Miami-Dade and Broward, the shares were 48% and 46%, respectively.
In the condominium and townhome market, cash sales ranged from 70% to 90%, with Palm Beach County (90%) and Martin County (82%) having the highest shares.
The increase in cash sales in Miami-Dade's million-dollar market, from 42% in 2019 to 48% in 2024, indicates a growing presence of wealthy buyers. These buyers significantly contribute to the local economy through housing-related and consumer spending. In 2021, analysis of IRS migration data showed that households moving into the five counties had an adjusted gross income of $28.8 billion. Specifically, households moving to Miami-Dade had an average adjusted gross income of $229,300.
In the lower price segment, cash buyers include home flippers, value-add investors, and second-home buyers leveraging equity from their primary residences. Reports indicate a rising share of single-family rentals in the rental market, with single-family homes for rent comprising 36% of total rental listings in May 2024, up from 21% in January 2019.
Areas with Highest Cash Sales Shares
In May 2024, areas with the highest cash sales shares of single-family homes included:
- Miami Beach, Miami-Dade County: 70%; $3.3 million
- Key Biscayne, Miami-Dade County: 68%; $4 million
- Wilton Manors, Broward County: 63%; $917,500
- Southwest Ranches, Broward County: 60%; $3.5 million
- Golden Glades, Miami-Dade County: 91%; $149,000
- Bal Harbour, Miami-Dade County: 89%; $649,000
- North Miami Beach, Miami-Dade County: 75%; $307,500
- North Miami, Miami-Dade County: 74%; $223,000
- Sunny Isles, Miami-Dade County: 73%; $832,000
The increasing trend of cash buyers in Southeast Florida's real estate market highlights the region's ongoing appeal to wealthy individuals. This trend not only strengthens the housing market but also positively impacts the local economy through substantial housing-related and consumer spending. As the region continues to attract affluent buyers, the market dynamics are likely to remain favorable, further solidifying Southeast Florida's position as a prime destination for real estate investments.