California real estate investors are paying cash for homes

Investors paying cash for houses accounted for one in four home sales during the past year in Sacramento County and West Sacramento, becoming dominating players in a distressed market and squeezing out scores of first-time buyers, 2009 statistics now show.

Many of these cash buyers are from the Bay Area. They've re-established that region's traditional link to Sacramento real estate and are scoring houses at up to 10 percent off listing prices, local market participants say.

Buying with cash, says local broker associate Jim Swanson, is another Sacramento "gold rush."

Carey Covey, a Cook Realty agent in Sacramento, said he recently sold a bank repo to a Sunnyvale investor by phone.

"I never met him. He never saw the property," Covey said.

He paid $55,000 — in cash.

Cash buys suggest there's still plenty of money out there despite the bad economy. And it's flowing into a market where repo prices in 2009 often remained well below $100,000 or even $70,000.

"There are some people who have money in a 401(k) and want to find better use for it," said Swanson of Prudential California Realty. "I have clients taking cash out of properties they already own and using that money to buy real estate. I have one cash buyer who planned to use loans, but he had plenty of savings."

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