For my story last night on Vantage Pointe and the surrounding downtown condo market, I got some interesting new numbers about the state of the market.
One of those that didn’t fit in the story: The share of buyers downtown that pay cash for their units. Getting mortgages downtown can be really tricky these days because banks have tightened their rules for buyers purchasing condos.
Towers have to have certain ratios of owners actually living in their units, not using them for a second home or renting them out, and the complexes’ homeowners associations have to meet certain standards. (I wrote about this issue last year as it related to the Vantage Pointe mess.)
Analyst Andrew LePage from MDA DataQuick provided us with some new numbers to see just how many buyers skirt that difficulty by not using a mortgage.
In April, May and June combined, about 34 percent of the buyers paid cash for their units, LePage said. (That number was preliminary because some late June sales might not yet show up in that number, he said.)
LePage discerns this statistic by culling all of the 92101 sales where there was no corresponding purchase mortgage in the public record. But some of these “cash” buyers could have found other financing arrangements besides a typical mortgage, or might take out mortgages after they purchase the properties.
The 34 percent share is up a little bit from the three months before that. In the first quarter, 32.9 percent of the buyers in the 92101 ZIP code paid with cash.
That share has hovered between 30 percent and 35 percent every quarter since summer 2008, when a giant credit crunch wreaked havoc on the world of condo financing. The quarter right before that, second quarter 2008, just 23 percent of the buyers appeared to pay cash.
— KELLY BENNETT