A whopping 20 percent of Southern California homes are paid for fully in cash. It’s easy to jump to conclusions about what that means. Namely, that it’s foreign money.
But it turns out, most cash buyers in Southern California are rich parents and people in the tech industry, KPCC reported.
Geoff McIntosh, president of the California Association of Realtors, told KPCC that foreign investment in the residential market slowed down about four to five years ago. Now, those investors make up only about 5 percent of cash buyers, according to the association’s research.
The bulk of cash buyers are actually rich parents buying estates for their children, McIntosh said.
“[Kids are] going to mom and dad and saying, ‘We really want to buy something and would love it if you give us the money,’” he told KPCC.
Richard Green, director of the USC Lusk Center for Real Estate, said his research shows it’s also people in the tech industry.
On top of hefty salaries, many are paid with stock options meaning they can cash out big when their company goes public.
“In California, people sell stock to buy houses in a big way,” Green said,telling KPCC that the phenomenon is unique to California and New York. [KPCC] — Subrina Hudson