I had a prospective Big Bear lakefront seller ask me the other day how often buyers purchase lakefronts with cash. I hadn't run those numbers recently so I decided to take a look.
Looking back through 10 years of lakefront homes sales in Big Bear, 88 out of the 220 sales were cash purchases, representing 40% of all sales.
Of course this lead to other questions, such as whether the cash purchases were more frequent among higher-end lakefront sales or lower-end sales. When breaking down the average sale price of cash sales and non-cash sales, you get about the same results. The average sales price for cash sales was $1,269,436 whereas non-cash sales were slightly lower at $1,209,092.
How about trends? Have there been more cash sales over the last few years, or fewer? Looking back over the last 3 years, there have been 22 cash sales compared to 23 non-cash sales, with cash sales of Big Bear lakefronts almost being equal to non-cash sales. It's a pretty small sample size, but it would make sense that cash sales have become more prevalent in today's booming economy.
As many realtors often say, "Cash is King", meaning that cash offers trump other non-cash offers and often times allow the buyer to pick up property at a discounted price. So I looked at lakefront cash purchases to see if they were able to gain a price edge in negotiations. Looking at the data, cash sales were purchased on average at 93.9% of list price whereas non-cash sales were bought at 94.03% of list price. So it appears that there was no significant cash discount when lakefront home buyers purchased with cash.
Lastly, I wondered if the 40% of lakefront cash purchases was more than that of non-lakefront purchases. It turns out that 35.2% of all Big Bear homes sales are cash. So Big Bear lakefronts are more likely to be purchased with cash than non-lakefronts, although only 5% more likely.