Buyers using cash to pay for that home? Chances are they will buy at a discount

A recent report released by RealtyTrac shows that all-cash homebuyers of single-family homes and condos across the country paid 23% less per square foot than all homebuyers in the first quarter of 2016.

In the first quarter of 2016, all-cash buyers purchased single-family homes and condos for a median of $91 per square foot, compared to $118 per square foot for all homes purchased nationwide.

Harrisburg was the second-highest on the list of cash buyers receiving the most percentage off. Buyers in the capital city saw an average discount of 52% for all-cash buyers, only 6.2% behind the top spot, Baltimore.

“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 in the release. “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.”

Meanwhile, institutional investors, which the report defines as “entities that purchase at least 10 single-family homes and condos in a calendar year,” purchased 2.6% of all single-family home and condo sales during this time period. This is a decrease of 4% from the last quarter of 2015, and 3.4% below the first quarter of 2015. Institutional investor sales have decreased year-by-year for the 11th year in a row.

However, the York-Hanover area saw an increase of 6.9% of institutional investor purchases. Additionally, Pittsburgh saw a large year-to-year increase of institutional investor purchases, an increase of 85%.