Home Sellers Realized Average Price Gain of $44,000 in First Quarter of 2017, Highest Since Q3 2007
Average Homeownership Tenure Backs Off Record High in Q4 2016, Still Up From Year Ago;
Distressed Sale Share Declines Annually for 23rd Consecutive Quarter
Median Prices Above Pre-Recession Peaks in 54 Percent of Markets
IRVINE, Calif. – April 27, 2017 — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Q1 2017 U.S. Home Sales Report, which shows that homeowners who sold in the first quarter realized an average price gain of $44,000 since purchase, representing an average 24 percent return on the purchase price — the highest average price gain for home sellers in terms of both dollars and percent returns since Q3 2007.
Meanwhile the report also shows that homeowners who sold in the first quarter had owned an average of 7.97 years, down slightly from a record-high average homeownership tenure of 8.00 years in Q4 2016 but still up from 7.68 years in Q1 2016. Homeownership tenure averaged 4.26 years nationwide between Q1 2000 and Q3 2007, prior to the Great Recession.
“The first quarter of 2017 was the most profitable time to be a home seller in nearly a decade, and yet homeowners are continuing to stay put in their homes longer before selling,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “This counterintuitive combination is in part the result of the low inventory of move-up homes available for current homeowners, while also perpetuating the scarcity of starter homes available for first-time homebuyers.
“There are some early signs this inventory logjam may be loosening up in some markets, with the average homeownership tenure down from a year ago in nine of the 66 markets we analyzed, including Memphis, Dallas, Boston, Portland and Tampa,” Blomquist added. “Sky-high potential price gains may be finally prompting more homeowners to sell.”
Markets with biggest home seller price gains
Among 97 metropolitan statistical areas with at least 1,000 home sales in Q1 2017 (and with previous sales price information available), those with the highest average price gain since purchase realized by home sellers during the quarter were San Jose, California ($356,500 average price gain); San Francisco, California ($276,750 average price gain); Los Angeles, California ($187,000 average price gain); Honolulu, Hawaii ($161,110 average price gain); and Oxnard-Thousand Oaks-Ventura, California ($160,000 average price gain).
“Across our Southern California markets, low listing inventory has continued to drive multiple-offer scenarios,” said Michael Mahon, president at First Team Real Estate covering the Southern California market. “We have noticed many buyers now leveraging investment accounts, as well as some leverage of reverse mortgages, to enable their ability to negotiate in competitive multiple-offer scenarios. This level of competition, as well as continued signals of a growth economy, has created momentum particularly in the luxury market of over $1 million in sales price.”
Metro areas with the highest percent return on the previous purchase price were San Jose, California (71 percent average ROI); San Francisco, California (65 percent); Seattle, Washington (56 percent); Portland, Oregon (52 percent); and Modesto, California (51 percent).
“Thanks to Seattle’s robust economic and job growth, home prices continue to rise at well above average rates and have now surpassed their pre-housing bubble peak. Because of this, it’s no surprise that distressed sales continue to fall,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “The increase in all-cash home sales in Seattle is likely not a result of investors, but rather all-cash buyers who are using this tactic to win homes in what it is a hyper-competitive housing market.”
Counter to the national trend, there were six markets out of the 97 analyzed (6 percent) where first quarter home sellers realized a loss since the previous purchase on average: Baton Rouge, Louisiana (10 percent average loss); Huntsville, Alabama (5 percent average loss); Milwaukee, Wisconsin (3 percent average loss); Columbia, South Carolina (3 percent average loss); Winston-Salem, North Carolina (2 percent average loss); and Augusta, Georgia (1 percent average loss).
Cash sales share down from a year ago, still above pre-recession levels
All-cash sales represented 30.0 percent of all single family and condo sales in Q1 2017, up from 29.1 percent in the previous quarter but down from 32.1 percent in Q1 2016. The 30.0 percent share in the first quarter was well below the peak of 44.7 percent in Q1 2011 but was still above the pre-recession average of 20.4 percent from Q1 2000 to Q3 2007.
“With a stronger market and overall sales increasing, we are seeing a decrease in foreclosure sales across the markets we serve, as well as seeing a decrease in institutional investors purchasing homes,” said Matthew Watercutter, senior regional vice president and broker of record for HER Realtors, covering the Dayton, Columbus and Cincinnati markets in Ohio. “With the stronger market and availability of money from institutional lenders such as mortgage companies and credit unions, we are seeing a decrease in cash purchases, as more properties are being sold to owner occupants and fewer to investors.”
Among 150 metropolitan statistical areas with a population of at least 200,000 and at least 100 all-cash sales in Q1 2017, those with the highest share of cash sales in Q1 2017 were Salisbury, Maryland (61.2 percent); Raleigh, North Carolina (60.6 percent); Naples, Florida (56.6 percent); Binghamton, New York (54.3 percent); and Spartanburg, South Carolina (53.3 percent).
Counter to the national trend, 51 of the 150 metro areas analyzed in the report (34 percent) posted a year-over-year increase in share of all-cash sales, including New York, San Francisco, Riverside-San Bernardino in Southern California, Seattle and Minneapolis-St. Paul.
Other report findings:
- Total distressed sales — bank-owned (REO) sales, third-party foreclosure auction sales, and short sales — accounted for 16.9 percent of all single family home and condo sales in Q1 2017, up from 15.5 percent of sales in the previous quarter but still down from 20.3 percent of sales in Q1 2016. The first quarter was the 23rd consecutive quarter with an annual decrease in share of distressed sales.
- Among 130 metropolitan statistical areas with a population of at least 200,000 and at least 100 total distressed sales in Q1 2017, those with the highest share of distressed sales during the quarter were Atlantic City, New Jersey (42.7 percent); Rockford, Illinois (34.3 percent); Trenton, New Jersey (30.7 percent); Indianapolis, Indiana (30.7 percent); and Philadelphia, Pennsylvania (30.7 percent).
- The median home sales price nationwide was $225,000 in Q1 2017, up 2 percent from the previous quarter and up 13 percent from a year ago to a new post-recession high — although still 1 percent below the pre-recession peak of $227,000 in Q3 2005.
- Six of the 95 markets analyzed (6 percent) hit new all-time home price peaks in Q1 2017: Salem, Oregon; Seattle, Washington; Greeley, Colorado; Boise, Idaho; Fort Collins, Colorado; and Provo, Utah. A total of 51 of the 95 markets analyzed (54 percent) have hit new all-time home price peaks since the end of the Great Recession in Q2 2009.
- The share of single family home and condo sales sold to institutional investors (entities buying at least 10 properties in a calendar year) dropped to 1.7 percent in Q1 2017, down from 3.4 percent in the previous quarter and down from 2.8 percent a year ago to the lowest level as far back as data is available, to Q1 2000.
- Sales to FHA buyers (typically first time homebuyers or other buyers with a low down payment) represented 14.5 percent of all single family home and condo sales in Q1 2017, down from 15.1 percent in the previous quarter and down from 15.0 percent a year ago to the lowest level since Q1 2015 — a two-year low.
The ATTOM Data Solutions U.S. Home Sales Report provides percentages of distressed sales and all sales that are sold to investors, institutional investors and cash buyers, a state and metropolitan statistical area. Data is also available at the county and zip code level upon request. The data is derived from recorded sales deeds, foreclosure filings and loan data. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available.
All-cash purchase: sale where no loan is recorded at the time of sale and where ATTOM has coverage of loan data.
Homeownership tenure: for a given market and given quarter, the average time between the most recent sale date and the previous sale date, expressed in years.
Home seller price gains: the difference between the median sales price of homes in a given market in a given quarter and the median sales price of the previous sale of those same homes, expressed both in a dollar amount and as a percentage of the previous median sales price.
Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in a calendar year.
REO sale: a sale of a property that occurs while the property is actively bank owned (REO).
Short sale: a sale of a property where the sale price is less than (short) the combined amount of loans secured by the property.
Third-party foreclosure auction sale: a sale of a property that occurs at the public foreclosure auction (trustee’s sale or sheriff’s sale) in which the property is sold to a third-party buyer and does not transfer back to the foreclosing bank.
About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. residential and commercial properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers and the media in multiple ways, including bulk file licenses, APIs and customized reports.
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