Cash Buyers In Arlington Squeeze An Already-Tight Housing Market

ARLINGTON, VA — Homebuyers who pay cash in Arlington are making it more difficult for people who need to borrow money to buy properties, according to a Washington Post analysis of data from the real estate company Redfin.

The Ballston area and parts of the Ashton Heights, Buckingham, Arlington Forest, Bluemont and Boulevard Manor neighborhoods of Arlington saw the highest percentage of properties paid in cash in 2022. In these neighborhoods, which are part of the 22203 ZIP code, 41 percent of sales were 100-percent all cash buys.

The Rosslyn area and other Arlington neighborhoods in the 22209 ZIP code were next, with 39 percent of property sales paid in all cash, according to the data.

At 17 percent, the Westover area and surrounding Arlington neighborhoods in the 22205 ZIP code had the smallest percentage of property sales in the county paid in all cash.

Across the nation, high prices are slowly starting to decline, but a low inventory and steep home mortgage costs already put homeownership out of reach for many buyers, the analysis found. What’s also contributing the difficulty is an 8 percent increase in the number of people who pay cash, according to the analysis

About a third of U.S. homes (31.9 percent) were purchased with all cash in October, up from 29.9 percent in October 2021, and the highest share since 2014 when the housing market was rebounding from the foreclosure crisis in the Great Recession, according to Redfin.

In April 2020, only a fifth of homes were purchased with cash, a record low.

The Post’s analysis looks at 2022 home sales by ZIP code. Here's data by ZIP code in Arlington:

• 39 percent of homes in the 22209 ZIP code were purchased with cash.
• 29 percent of homes in the 22207 ZIP code were purchased with cash.
• 22 percent of homes in the 22206 ZIP code were purchased with cash.
• 17 percent of homes in the 22205 ZIP code were purchased with cash.
• 23 percent of homes in the 22204 ZIP code were purchased with cash.
• 41 percent of homes in the 22203 ZIP code were purchased with cash.
• 31 percent of homes in the 22202 ZIP code were purchased with cash.
• 29 percent of homes in the 22201 ZIP code were purchased with cash.

The trend began during the pandemic as mortgage rates began to rise, according to Chen Zhao, Redfin’s lead economics researcher, who said the affluent are motivated to pay cash to avoid high interest rates on mortgages.

A separate report from the National Association of Realtors found first-time homebuyers in the United States are typically white, wealthy and older. First-time buyers made up only about a quarter (26 percent) of buyers, down from 34 percent in 2021. Their average age was 36, up from 33 the previous year, and the average age of repeat buyers climbed to 59 — both all-time highs.

Overall, 88 percent of buyers were white or Caucasian, the report showed.

“Only the wealthy are essentially buying homes,” Lawrence Yun, chief economist at the National Association of Realtors, told The Post. “If this trend was to continue, that means something fundamentally is wrong with society.”

RELATED: NoVA Homes Getting Multiple Offers In 2023 With Mortgage Rate Retreat