From Lauren Beale at the LA Times: Cash-only home sales rise in California



All-cash buyers grabbed a record 30.9% share of the Golden State's houses and condos in January ... Cash activity has been brisk for months in foreclosure-ridden areas such as Riverside and San Bernardino. But now, the cash buyer has become a major player in Southern California's most expensive communities, where cash deals account for as much as two-thirds of home sales.

...

In the Southland's $1-million-and-up market, 29.2% of buyers paid cash last year — the highest percentage since 1994, DataQuick statistics show. For homes selling for $5 million and up, 62.2% paid cash.

At the low end it is probably mostly investors. The high end has always had a fairly high percentage of cash buyers, but this is very high. The good news is these buyers will never have negative equity (unless they take out a mortgage).The large percentage of cash buyers is part of the reason that the MBA purchase index has not been tracking home sales very closely (it also appears that the NAR has been overstating sales ).