The U.S. Department of the Treasury announced Wednesday that title companies handling cash real estate deals in Miami and Manhattan will have to reveal the buyers’ identity if they are spending more than $ 3 million.
The new rules will lift the veil of secrecy that covers many cash transactions, which are often made by shell corporations without revealing the buyers’ names. The regulation will also shed light on how many cash transactions are made by foreign investors.
It’s not an accident that the government started its cash-buyer regulations in Florida. A new report from Zillow found that eight of the top 10 markets for cash buyers are in Florida – and Miami is number one. Cash buyers still make up more than half of all transactions in the Miami housing market- down from more than 70 percent in 2012, when investors were helping to pick up the slack in Miami’s hard-hit housing market.
During the housing recession, cash buyers helped revive housing markets by keeping sales alive when mortgages were hard to come by. Today, cash deals are far less common, according to Zillow’s latest analysis of cash sales.
Here are the housing markets with the largest percentage of cash buyers:
- Miami, FL. This market was targeted by the federal government for the rollout of its new requirements because 55 percent of sales there in the second quarter of 2015 were made with all cash. Foreign buyers are common in Miami, and they are often looking for a safe place to invest their cash.
- Sarasota, FL. In Sarasota, 53.4 percent of all sales were made with all cash in the second quarter of last year.
- Fort Myers, FL. Nearly three-quarters of all sales were made with cash in this Gulf Coast market as recently as 2011. Now it comes in third place at 51.8 percent.
- Daytona Beach, FL. The percentage of deals made with all cash dipped in 2015 to just under 50 percent.
- Tampa, FL. Cash sales are still common in Tampa, but they’ve dropped below half of all transactions, to 47.8 percent.
- Cleveland, OH. Cleveland was hit hard in the recession, and investors noticed. In 2013, nearly 60 percent of all sales were all-cash. That has dropped to 45.2 percent.
- Lakeland, FL. Back in Florida, the Lakeland market is still attractive to cash buyers, with 44.7 percent of all transactions being made in cash.
- Detroit, MI. Detroit is a famously depressed market that has made some strides in recent years, but cash buyers still make up 44.6 percent of all transactions. That’s down from 73.7 percent at its cash-sales peak.
- Melbourne, FL. Nearly 44 percent of buyers in Melbourne bring all cash.
- Orlando, FL. in Orlando, home buyers bring cash 43.8 percent of the time.