2Q Home Profits Reach 10-Year High

ATTOM Data Solutions, Irvine, Calif., said home sellers in the second quarter saw the highest average price gain in 10 years.

The company’s quarterly U.S. Home Sales Report also noted average homeownership tenure increased to a record-high 8.05 years.

The report said homeowners who sold in the second quarter realized an average price gain of $51,000 since purchase–the highest average price gain for home sellers since Q2 2007, when it was $57,000. The average home seller price gain represented an average return of 26 percent on the previous purchase price of the home, the highest average home seller return since Q3 2007, when it was 27 percent.

The report also shows that homeowners who sold in the second quarter had owned an average of 8.05 years, up from 7.85 years in the previous quarter and up from 7.59 years in Q2 2016 to the longest average homeownership tenure as far back as data is available, Q1 2000.

“Potential home sellers in today’s market are caught in a Catch-22,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “While it’s the most profitable time to sell in a decade, it’s also extremely difficult to find another home to purchase, which is helping to keep homeowners in their homes longer before selling. And the market is becoming even more competitive, with the share of cash buyers in the second quarter increasing annually for the first time in four years.”

The report said all-cash sales represented 28.9 percent of all single family and condo sales in the second quarter, down from 31.3 percent in the first quarter but up from 27.3 percent of all sales a year ago, the first annual increase in the share of cash sales since Q1 2013.

Among major metropolitan areas with a population of at least 1 million, those with the highest share of all-cash sales in the second quarter were Raleigh, N.C. (57.4 percent); Miami (46.2 percent); Detroit (45.2 percent); Oklahoma City (44.6 percent); and Tampa-St. Petersburg, Fla. (43.2 percent).

The share of U.S. single family home and condo sales sold to institutional investors (entities buying at least 10 properties in a calendar year) rose to 2.1 percent in the second quarter, up from 1.8 percent in the first quarter but down from 2.6 percent a year ago.

Among 73 metropolitan statistical areas with a population of at least 200,000 and at least 40 institutional investor sales in Q2 2017, those with the highest share of institutional investor sales in the second quarter were Macon, Ga. (8.9 percent); Memphis, Tenn. (8.6 percent); Killeen-Temple, Texas (8.3 percent); Clarksville, Tenn. (7.8 percent); and Birmingham, Ala. (7.4 percent).

Nineteen metro areas (26 percent) posted year-over-year increases in the share of institutional investor purchases, including Memphis (up 6 percent); Charlotte, N.C. (up 6 percent); Nashville (up 37 percent); Baltimore (up 3 percent); and Raleigh, N.C. (up 42 percent).

The report said among 118 metropolitan statistical areas with at least 1,000 home sales in second quarter, those with the highest average home seller returns were San Jose, Calif. (75 percent); San Francisco (65 percent); Seattle (63 percent); Modesto, Calif. (62 percent); and Denver (62 percent).

Counter to the national trend, the average homeownership tenure in Q2 2017 decreased from a year ago in 25 of 89 metro areas analyzed in the report (28 percent), including Chicago, Dallas, Philadelphia, Washington, D.C., and Detroit.

“Across Southern California we are witnessing concerns over housing affordability keeping homeowners in current homes for longer tenure, and keeping available home inventories low in supply.” said Michael Mahon, president at First Team Real Estate covering the Southern California market.

Among major metropolitan areas with a population of at least 1 million, those with the longest average homeownership tenure for home sellers who sold in the second quarter were Boston (11.91 years); Hartford, Conn. (11.90 years); Providence, R.I. (10.28 years); San Francisco (9.87 years); and San Jose, Calif. (9.71 years).

ATTOM said total distressed sales–bank-owned (REO) sales, third-party foreclosure auction sales and short sales–accounted for 13.4 percent of all single-family and condo sales in the second quarter, down from 17.1 percent in the first quarter and down from 15.2 percent a year ago to the lowest level since Q3 2007.

Among 141 metropolitan statistical areas with a population of at least 200,000 and at least 100 total distressed sales in the second quarter, those with the highest share of total distressed sales were Atlantic City, N.J. (40.2 percent); Canton, Ohio (31.0 percent); Columbus, Ga. (27.8 percent); Trenton, N.J. (27.7 percent); and Akron, Ohio (27.5 percent). Metros that posted year-over-year increases in share of distressed sales, including New York (up 13 percent); Denver (up 3 percent); Pittsburgh (up 31 percent); Cincinnati, Ohio (up 19 percent); and Cleveland, Ohio (up 5 percent).