(Bloomberg News) Delavaco Properties LP plans to spend as much as $30 million this year and $40 million in 2012 to buy bank-owned houses and condominiums in foreclosure-ridden South Florida. The private-equity fund will pay cash.

As lenders tighten mortgage standards and consumers stay on the sidelines amid a five-year slide in home prices, all-cash purchases are surging. The deals are done mostly by investors who can get properties for less than buyers needing loans, fix them up and resell or rent them.

"If there weren't vultures out there, you'd have a city of dead carcasses," Robert Theocles, an independent consultant for Fort Lauderdale, Fla.-based Delavaco, said in a telephone interview. "It's like the circle of life."

A record 33% of existing-home sales were made to cash buyers in February, when an annualized 4.88 million properties changed hands, the National Association of Realtors reported March 21. That compares with 15% of the 4.82 million annualized sales when the Chicago-based trade group started monthly tracking of such purchases in October 2008.

In Florida's Broward County, where Theocles is based, deals with no mortgages made up 69% of sales in February, according to Southeast Florida Multiple Listing Service data.

The national sales data don't count homes bought in foreclosure auctions on courthouse steps, which are almost all cash-only transactions. The "lion's share" of all-cash purchases are by investors, according to Walter Molony, a spokesman for the Realtors association, though the group doesn't keep specific numbers.

Big Cash Cities

About half of all purchases were done with cash in the Miami, Las Vegas and Phoenix areas, where prices have plunged and bank-owned properties abound because of high foreclosure rates, said Oliver Chang, a housing-market analyst with Morgan Stanley, the New York-based investment bank.

Cash sales in those cities--as well as in Chicago, Cleveland, Los Angeles, New York, Seattle, San Francisco and Washington--rose to 199,557 homes last year compared with 138,888 in 2004, according to a March 21 report co-written by Chang. Short sales, where the bank accepts less than the principal on a loan, and foreclosures accounted for 59% of last year's cash sales, up from 10% in 2004, Morgan Stanley reported.

Cash buyers paid an average $81.83 per square foot for foreclosed properties in the 10 cities last year, 36% less than distressed properties bought with a mortgage, the report said.