Nationwide, all-cash buyers of single-family homes and condos paid 23% less per square foot than all home buyers, but cash buyers in 9% of local housing markets paid a premium price per square foot, according to RealtyTrac’s Q1 2016 U.S. Cash & Institutional Investor Housing Market Report.

The median price paid nationwide for all-cash buyers of single-family homes and condos was $91 a square foot in the first quarter of 2016, a discount of 23% below the median $118 per square foot for all home purchases.

“While large institutional investors and other cash buyers continue to shrink as a share of U.S. home sales, these buyers still typically beat out traditional buyers using financing — in some cases even when they submit a lower offer for a home,” said Daren Blomquist, senior vice president at RealtyTrac. “Additionally cash buyers are often willing to take on properties in poor condition that may not readily qualify for standard financing, another reason why cash purchases normally sell at a lower price per square foot.

“Markets where we see the opposite — with cash buyers actually paying a premium price per square foot — could be in danger of overheating,” Blomquist added. “In most markets, cash buyers act as an anchor for home values, but in these exceptions to the rule, cash buyers are acting as an oversized sail, catching more wind and pushing home price appreciation to a potentially precarious pace.”

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