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Jun 26, 2023 One-in-four Las Cruces homebuyers are paying cash for their homes

Gary Sandler

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Published 26 June 2023

Many Las Cruces homebuyers, especially those in the first-time buyer category, are finding it difficult to compete against cash buyers. That’s because 26.9 percent of the 846 new and existing homes, townhomes and condominiums sold through June 21 of this year were cash purchases, according to a June 21 report from the Las Cruces Association of Realtors. During the same period last year, cash buyers were responsible for 27.5 percent of all sales.

Paying cash for a home benefits both buyers and sellers. Number one on the list of advantages is that “Cash offers are 97% more likely to be successful”, according to the folks at www.homelight.com. Other benefits include saving thousands of dollars in loan costs typically charged to buyers, the ability to close in days or weeks rather than months, the opportunity to forego a formal appraisal, and the total elimination of a financing contingency.

The remaining Las Cruces-area homebuyers financed their purchases using a variety of methods. The largest group of buyers (41.7%) obtained conventional loans. Another 16.1 percent utilized FHA loans, while 13.3 percent took advantage of their Veterans Administration loan benefits. An additional 1.7 percent arranged their own private financing. Four buyers purchased with owner financing. Owner financing is where the buyer hands the seller a cash downpayment, with the seller allowing the buyer to make payments to the seller until the balance is paid off or a balloon payment is due.

The 846 closed sales booked to date this year represent a 30.8 percent decrease in production from the 1,222 sales booked during the same period last year. The opposite is true for home values. The year-over-year combined median price for the new and existing homes, townhomes and condominiums sold through June 21 of this year was $290,525, up $10,575 from last year’s median of $279,950.

Separating the sales into individual categories revealed that the year-over-year median price for the new and existing free-standing, single-family homes sold this year rose by $14,250, from $285,000 to $299,250. Townhome values also increased, rising to $221,750 from $216,000. Condominium values made the most impressive leap, growing from $180,000 to $221,539.

A sampling of 177 of the 846 closed sales showed that 24.9 percent of buyers were first timers. Retirees were responsible for 15.8 percent of sales, and investors snatched up another 15.3 percent of our inventory. The remaining buyers were either moving up or down in price, making health or job-related moves, or moving up or down in size.

Well, there you have it. So far this year, sales are down around 31 percent from a year ago, and values are up by just over $10,000.00. Our inventory remains low with just 304 new and existing homes, townhomes and condominiums to choose from.

See you at closing.

Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces, New Mexico. He loves to answer questions and can be reached at (575) 642-2292 or Gary@GarySandler.com.

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