Cash may be the king in real estate across the country, but it's the ace in Tampa Bay.
Cash buyers accounted for 38 percent of all residential home sales in Hillsborough County, 46 percent in Pasco County and an astounding 52 percent in Pinellas County in 2010 — all clobbering the national average of 28 percent.
In all three counties, investors are gobbling up homes priced lower than $100,000, with nearly 30 percent of sales in Hillsborough and Pinellas and a half of sales in Pasco sold for under that amount.
At the very low price end, sales remain equally robust. Last year, 695 houses in Pinellas and 766 in Hillsborough sold for less than $30,000, according to data from the Pinellas Realtor Organization.
What's fueling the surge in cash sales? Tight lending standards, a discount for offering cash, and a sense that prices might have bottomed out.
Real estate pros said Pinellas likely stood out with its 52 percent rate because it has an older housing stock with lower prices and many more older condos used for second homes and investment properties.
Some investors, including Joe Eletto, a Realtor with Century 21 Beggins Enterprises in Apollo Beach, also see low prices throughout the Tampa Bay area as an opportunity to get a higher rate of return on their money than in the stock market.
In 2009, Eletto used $197,000 in cash from his Individual Retirement Account to buy two rental houses that he plans on holding for 10 years. The rental income goes directly to the IRA to avoid penalties.
"I'm earning 8 to 10 percent on my money," said the retired Sears executive. "That's pretty good."
Banks generally won't lend money to buy the thousands of homes in disrepair coming out of foreclosure. Banks don't want to keep the houses and are willing to reduce prices even more for cash buyers.
Paying cash "is a guarantee to get a lower deal," said Nick Fraser, owner of Remax All Star in Madeira Beach.
Jeff Wernick of Tager Realty in Tampa has represented buyers of more than 30 homes priced lower than $100,000 in the last six months. Typically, the investors spend an average of $7,000 to $10,000 to fix the homes.
The criteria for their investment purchases are specific. "We're looking for rock-bottom prices on quality homes," he said. "We buy, fix and rent."
Even in a market saturated with lower-priced homes, many purchasers, like first-time buyers, cannot get financing. Lenders are even turning away people with decent credit and down payments. So if they want the house, they have to pay cash. If they can't, that leaves more homes for investors to bid on.
An investor with a track record of successful real estate deals can also raise money from alternative sources like wealthy individuals and private equity groups, an option not often available to someone looking to buy a house to live in.
Local economists caution that the spike in cash sales isn't a sign that the housing market has recovered in the bay area. Regions with more foreclosures, like the bay area, will have higher percentages of cash deals.
"Investors are a big, big factor," said economist Scott Brown of Raymond James Financial in St. Petersburg. "This is going to go on for a while."
Of the 31,670 residential homes that sold in Pinellas, Pasco and Hillsborough counties last year, 14,274 sold for cash. The cash sales trend should continue.
Scott Samuels of Remax Metro in St. Petersburg deals with bank-owned properties. Many investors, he said, sat on cash for several years and are now buying.
He noticed that banks decreased the amount of homes they put on the market in the fall until some of the inventory cleared up. That is changing.
"There putting all the cheap stuff out there now," he said. "It's the time to buy."
Times researcher Shirl Kennedy contributed to this report. Mark Puente can be reached at firstname.lastname@example.org or (727) 893-8459. Follow him at Twitter at twitter.com/markapuente.