Luxury Homebuyers Paying Cash

Although Bay Area homes are selling at 2005 prices and interest rates are at an all-time low, most high-end home buyers are paying cash for their homes, according to D.J. Grubb, co-owner of , a Piedmont, Oakland and Berkeley brokerage.

"Our East Bay luxury home market has an active, enthusiastic pool of buyers who are driving up activity by making multiple offers on many well-priced homes," said Grubb. "We do not have the home inventory gluts found in other parts of the state and country."

Grubb says that his 62 agents are selling between 50 and 60 homes per month, and approximately 75 percent of those in the $3 to 6 million range are purchased without any financing. The other 25 percent of homes are sold with a large cash down payment and parents are becoming a larger part of the financing equation.

"The banks are only paying 3 to 4 percent interest on savings plans and have tightened up their lending qualifications," said Grubb. "Parents can help their kids get into a home and make 5 to 6 percent interest, which is more profitable for them, so it's a win-win situation."

EDITOR'S NOTE: The content of this article was provided by The Grubb Co.