Photo: Robert Clark
US homesellers in Q2 this year gained an over of $51,000 above their original purchase price.
That’s the largest average gain since the same period in 2007, when the average was $57,000, according to ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database.
This represents an average return of 26 percent on the purchase price of the home — the highest average since Q3 2007, when it hit 27 percent.
Sellers on the West Coast saw the highest average returns — San Jose, CA (75 percent), San Francisco, CA (65 percent), Seattle, WA (63 percent), and Denver, CO (62 percent).
This was among 118 metro areas with at least 1,000 home sales recorded in Q2 2017 and previous sale data available, says ATTOM.
“An ongoing issue in the greater Seattle area is a lack of supply which is aggressively driving up home prices,” Matthew Gardner, chief economist at Windermere Real Estate, tells ATTOM.
Of course, the “only” solution is to build more homes to satisfy the demand, but land constraints and high construction costs are making this a Herculean feat.
“Unfortunately I do not expect this trend to change until zoning and regulation costs change, which is unlikely in the current political climate,” says Gardner.
Meantime, homeowners are staying in their homes longer. ATTOM found that homeowners that sold in Q2 had owned their home an average of 8.05 years, up from 7.85 the previous quarter and 7.59 years the same time last year.
This was the longest tenure of homeownership on record, dating back to Q1 2000 when it was first tracked by ATTOM. The overly competitive climate of the market is likely a factor in homeowners staying in their homes longer.
Meanwhile, bucking the national trend, homeownership tenure decreased in 28 percent of the metros analyzed for the report.
“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,” senior vice president at ATTOM Data Solutions Daren Blomquist says.
And that is not likely to change in the upcoming quarters, he suggests.
“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,” Blomquist adds.
All-cash sales made up nearly 29 percent of single-family and condo sales in Q2 2017, up from 27.3 percent last year. However, it was down from a share of 31.3 percent recorded in Q1 2017.
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