Birmingham MLS Cash Sales

Rob Drum · Posted on
Birmingham Market Update – March 2019 Plus Commentary On Cash Sale Research

Why Study Cash Sales?

Cash sales are strong indicator of investor activity. Many houses needing repair will not qualify for financing and must be bought with cash. Many houses valued below $50,000 cannot qualify for financing either.

Knowing where the cash sales are taking place, allows us to see where other investors are working. That’s valuable information if you’re looking to learn more about how the Birmingham real estate market works.

Especially Important For Wholesalers

I’ve had a number of wholesalers request a list of cash sales for our market. They’re able to use that to look for new buyers of their properties.

Doesn’t that create unwanted competition for me since I buy a lot of off-market deals from them? Not really. The wholesalers I buy from know what I’m looking for and like working with me. However, they’ve got a lot of other deals to sell and hopefully this list can help.

LINK TO 2731 CASH TRANSACTIONS

Summary Data

I pulled the MLS data for the last 12 months of sales in Jefferson county, then separated “cash sales” from “non-cash” sales.

  • 27.5% Cash sales.
  • Generally lower prices than non-cash sales.
  • As Brian pointed out in the video above, the average price was skewed higher by the 4.1 million dollar sale. The median is a better gauge.

Where Are These Sales?

Here is a breakdown of the gross number of sales for the top 20 zip codes. It’s naturally weighted towards larger zip codes. There are some surprises here though.

  • All of the top 5 zip codes are heavy flipping areas. 35215 would be more “turnkey” rental flips.
  • They are also very high demand retail areas.

Where Is Cash King?

Below is a summary of what percentage of all sales in each zip code were cash. This ranking is not weighted by the size of the zip code or level of MLS activity.

  • These area’s are rental dominated.
  • The median sale price is below $50,000 in many of these areas. Below that point financing can be hard to obtain.
  • The first exception to that is 35213 at 33.3%. That’s Mountain Brook, which is one of the highest priced zip codes in the city.

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