In an O.C. Register article by Lansner, he analyzes reports from DataQuick and finds a new metric to show how different 2012 was, in a good way.
“The DataQuick crew was searching to find out what the impact of tough lending standards – such as higher down-payment requirements – and the rush of cash buyers meant in terms of the actual dollars bet on local housing.
What they discovered is remarkable: In 2012, Orange County buyers put $9.06 billion of their own funds into homes….last year’s local homebuyers put more cash into Orange County deals than any of the most recent crazy boom years – including the previous peak of $8.71 billion in cash invested in 2005.
DataQuick’s chief number cruncher, John Karevoll, says he was indeed surprised by the high level of buyer funds tossed at local real estate, noting that the boom was in part due what he called ‘a fussy mortgage market.’
Some might quibble that this stat may be tweaked by a rush of investors who are seeking homes as rental investments and tight inventories of homes to buy, a shortage that makes shoppers with high levels of cash more desirable to sellers.
Still, this high level of cash put into deals is a clear sign of house shopper confidence in local real estate – even if it’s a bit forced by curious market conditions and skittish lenders….
Or look at the heavy cash flow differently: If Orange County could have the best buying year since 2006 with tough lending restrictions requiring this wave of cash to be deployed, imagine what the market might look like if lending standards soften to anything near traditional norms.”