Investors may be fleeing Inland housing market

Cash sales of homes in the Inland Empire fell five percent year-over-year in July, according to data released Friday by CoreLogic.

Overall, cash sales accounted for nearly 24 percent of all home sales in Riverside and San Bernardino counties during the seventh month of the year. That was well below the national rate of 30.8 percent, Irvine-based CoreLogic reported in its monthly assessment of cash sales in the U.S. housing market.

Cash sales are important because they indicate the level of investment buyers – someone who buys a house, then drives up the price and sells it without ever intending to live in it – in the market at one time, Jordan Levine, senior economist at the UC Riverside School of Business’ Center for Economic Forecasting.

Because investment buyers take homes off the market, and are blamed by some economists for driving up housing costs, their disappearance from the market is generally considered good news, Levine said.

Investment buyers are usually the only people who can afford to pay cash for a home, particularly in a market as high-priced as Southern California, Levine said.

“The numbers show that the Inland Empire housing market is shifting back to the owner-occupancy side, and that has to be a good thing,” Levine said. “It means the market is getting back to normal and people are building equity.”

Nationally, homes purchased by cash have fallen year-over-year every month since January 2013 and are at their lowest level in nine years, according to CoreLogic.