ATTOM: 2019 Average Home Seller Profits at Record $65,500

ATTOM Data Solutions, Irvine, Calif., said home sellers nationwide in 2019 realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago.

The company’s Year-End 2019 U.S. Home Sales Report said the latest profit figure, based on median purchase and resale prices, marked the highest level in the United States since 2006. That $65,500 typical home seller profit represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006.

ATTOM said both raw profits and ROI have improved nationwide for eight straight years. However, ATTOM Chief Product Officer Todd Teta said last year’s gain in ROI – up less than 3 percentage points – was the smallest since 2011.

“The nation’s housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing ever-greater challenges for buyers seeking bargains. In short, it was a great year to be a seller,” Teta said. “But there were signs that the market was losing some steam last year, as profits and profit margins increased at the slowest pace since 2011. While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season.”

Among 220 metropolitan statistical areas with a population greater than 200,000 and sufficient historical sales data, those in western states continued to reap the highest returns on investments, with concentrations on or near the west coast. Metro areas with the highest home seller ROIs were in San Jose, Calif. (82.8 percent); San Francisco (72.8 percent); Seattle (65.6 percent); Merced, Calif. (63.2 percent) and Salem, Ore. (62.1 percent). The top four in 2019 were the same areas that topped the list in 2018.

Other key report data:

–The U.S. median home price increased by 6.2 percent in 2019, hitting a record high $258,000. The annual home-price appreciation in 2019 topped the 4.5 percent rise in 2018 compared to 2017, but fell from the 7.1 percent increase in 2017 compared to 2016.

–Among 134 metropolitan statistical areas with a population of 200,000 or more and sufficient home price data, those with the biggest year-over-year increases in median home prices were South Bend, Ind. (up 18.4 percent); Boise City, Idaho (up 12.6 percent); Spokane, Wash. (up 10.9 percent); Atlantic City, N.J. (up 10.6 percent) and Salt Lake City, Utah (up 9.6 percent).

–Homeowners who sold in the fourth quarter had owned their homes an average of 8.21 years, up from 8.08 years in the previous quarter and up from 7.95 years in the fourth quarter of 2018. The latest figure represented the longest average home seller tenure since the first quarter of 2000, the earliest period in which data is available.

–Nationwide, all-cash purchases accounted for 25.3 percent of single-family home and condo sales in 2019, the lowest level since 2007. The latest figure was down from 27.0 percent in 2018 and 27.7 percent in 2017, and well off the 38.4 percent peaks in 2011 and 2012. However, this is still well above the pre-recession average of 18.7 percent between 2000 and 2007.

–Distressed home sales, including bank-owned sales, third-party foreclosure auction sales, and short sales, accounted for 11.5 percent of all U.S. single family home and condo sales in 2019, down from 12.4 percent in 2018 and from a peak of 38.8 percent in 2011. The latest figure marked the lowest point since 2006.

–Institutional investors nationwide accounted for 2.9 percent of all single-family home and condo sales in 2019, down from 3.0 percent in 2018 to the lowest point since 2015.