Until recently, most home buyers thought financing was the only way to afford Philadelphia homes for sale. However, when the risk of a volatile housing market came to light, cash upfront suddenly seemed like the safer bet.

In a recent report, the number of all-cash real estate deals has gone up to nearly half of all real estate transactions made for 2013. As of July 2013, real estate data firm RealtyTrac reported a five-percent increase in all-cash deals compared to 35 percent last month and 31 percent July 2012. For many, cash upfront helps them steer clear of any sudden downturns in the stock market.

An unprecedented number of home buyers are forgoing a mortgage. Nearly half of all U.S. buyers during September paid cash, compared with 30 percent last year, according to RealtyTrac.

"Cash is king," said Dave Delgado, co-owner of a medical supply company in the Minneapolis-St. Paul area. He recently paid cash for a couple of suburban rental houses. "It's hard to say how the stock market will do, so we feel more confident and comfortable in the real estate market."

It's a welcome sign for the real estate market, yes, but on the other hand, this development poses a disadvantage to buyers depending on home loans as an increasing number of sellers prefer to deal with all-cash offers.

"The housing market continues to skew in favor of investors, particularly deep-pocketed institutional investors, and other buyers paying with cash," said Daren Blomquist, vice president at RealtyTrac.

Sensible Option

If American citizens are to take advantage of buying Center City, Philadelphia homes for sale, the question is “How?”

Paying with cash, experts say, means you're bold enough to take the plunge. In addition, home buyers bravely taking this option usually have plenty of money in reserve. In other words, they can afford the cash out.

Debts a Factor

In the end, it all boils down to which payment method will mitigate potential debt problems in the future. Leaving debts unpaid will reflect badly on your prospects for securing a different kind of mortgage later on, after all. While both options have their respective pros and cons, only your financial status will dictate which one suits you best.

Fortunately, reputable realtors like Joanne Davidow accept both deals as long as the price is right.

(Article image and excerpt from “Cash still reigns in real estate,” Star Tribune [via Philly.com], November 9, 2013)