All-Cash Deals See “Drastic” Increase in San Francisco

Rising interest rates have pushed more San Francisco home buyers to purchase with all-cash transactions, according to data from Parcl Labs. The numbers indicate that San Francisco saw close to double the number of all-cash deals this January compared to one year ago.

Figures from county records and mortgage sources show “drastic” increases in all-cash purchases across the Western U.S., according to the residential real estate data company. But while San Francisco was tracking about the same 10 to 20 percent increase over January 2022 as Seattle and L.A. until last fall, it shot up to a more than 80 percent increase by the end of last year, and after a short plateau, is up even higher in 2023.

The rise occurred at the same time that volume dropped precipitously in the city, indicating that what few deals were done at the time were coming from all-cash buyers. Agents have recently pointed out that Asian buyers are making a return to the Bay Area and they often buy all-cash, which could contribute to the increase.

All-cash purchases in Western markets such as Phoenix and Las Vegas were driven primarily by iBuyers, who then exited the market in the latter half of the year, according Parcl co-founder Jason Lewris. By early this year, the all-cash purchases in those areas dropped 20 percent below January 2022 levels as a result. But those buyers were never prominent in San Francisco, which could be another reason all-cash purchases in the Bay Area have continued to rise.

“Historically and currently, iBuyers have had very little presence in San Francisco,” he said via email. “This fact indicates that the rise in all-cash offers is not driven by these entities and highlights a major difference in the all-cash landscape between Phoenix, Vegas and San Francisco.”