All-Cash Deals on the Rise in NYC and Florida Luxury Markets as Mortgage Rates Climb

According to recent data from real estate appraisal and consulting firm Miller Samuel Inc., luxury housing markets in New York and Florida are experiencing near-record-high shares of all-cash transactions, indicating a significant shift away from mortgage-dependent deals during the pandemic era of low interest rates. In Manhattan, the share of all-cash transactions climbed to 63.4% in the first quarter, while the share of mortgage transactions reached an all-time low. Similarly, all-cash sales accounted for 85.7% of transactions in Royal Palm and Boca Raton, Fla. And 92.9% in Manalapan, Ocean Ridge, and Hypoluxo Island, both averaging over $10 million in sales price. While all-cash transactions are increasing across all price points, the trend is particularly pronounced among high-net-worth individuals who can finance purchases with equity withdrawn from the booming stock market and other assets. However, the University of California San Diego Rady School of Management recently found that all-cash buyers pay 10% less on average than mortgage buyers, and all-cash offers are standing out in increasingly competitive bidding wars. As mortgage rates continue to climb, experts predict that luxury housing prices will continue to rise, making all-cash deals more attractive for buyers seeking to save money.