Home sellers had it good at the end of last year, racking up
profits they hadn't seen in more than a decade, a new report finds.
In the last quarter of 2017, sellers pocketed an average
$54,000 over what they originally paid for their homes, according to a
recent ATTOM Data Solutions report. That's up 0.49% over the previous
quarter and nearly 14.6% over the same quarter the previous year.
And it's the most sellers have netted, an average 29.7%
profit, since the third quarter of 2007. Thank the national housing
shortage for those sky-high returns.
"If you're selling, you're taking advantage of a
red-hot housing market with low supply, high demand, and fast-appreciating home
prices in many areas," says Daren Blomquist, senior vice president at
ATTOM, a real estate information firm.
To come up with those figures, ATTOM compared the
median home prices in the last quarter of the year to just over
eight years ago (the average amount of time owners stay in
their homes before selling). ATTOM looked at recorded sales deeds,
foreclosure filings, and loan data for its report. Only metros with
sufficient historical data and a large enough population, mostly 200,000 and
up, were included.
West Coast homeowners did the best. Sellers in Silicon
Valley's uber-pricey San Jose, CA, scored the biggest profits, of about 90.9%. That
was followed by San Francisco, at 73.3%; Merced, CA, at 64.6%; Seattle, at
64.4%; and Santa Cruz, CA, at 59.8%.
"Those are the markets that were more insulated from
the downturn, because many of them are highly desirable, on the coast with
well-paying jobs. They were the first to recover when things turned
around," Blomquist says.
But they're not the only ones doing well.
"This housing boom started on the coasts, but is
spreading to the middle of the country," Blomquist says.
More than half of all of the metros included in the analysis
saw record-high home prices in 2017. Some of the bigger names were San
Francisco, Los Angeles, Dallas, Houston, and Atlanta.
Homeowners are staying put
The downside for sellers was that the same housing shortage
and ultrahigh home prices are hindering many of them from trading up and
finding a nicer or larger home in their area. After they unload their
properties, they still need a place to live.
That could help to explain why homeowners stayed put
for record lengths of time. Those who sold their properties in the last quarter
of the year had owned them for about 8.18 years. That's a slight increase from
8.12 years in the previous quarter and 7.78 years a year earlier.
It's also the longest homeowner tenure since data began
being collected on it in 2000.
A stronger economy means more all-cash sales, fewer
foreclosures
In a sign of a stronger economy, more buyers are also opting
to pay all cash for their residential real estate. These sales made up 29% of
single-family home and condo sales in 2017. That's up from 28.7% in 2017.
The metros with the most all-cash sales were Mobile,
AL, at 69.8%; Binghamton, NY, at 60.9%; Macon, GA, at 57.7%; and Columbus, GA,
at 56.2%.
"If you're a buyer in this housing market, it's a
full-contact sport," says Blomquist. "The buyers with the most cash
often win."
Meanwhile, distressed sales (think short sales, bank-owned
sales, and foreclosure auction sales) fell to a 10-year low, to make up
only about 14% of all single-family home and condo sales. That's a drop from
15.5% a year earlier.
"There's fewer people going into foreclosure because if
someone does get into trouble or lose their job, they have equity in their home
that can provide a cushion," Blomquist says.
