ATTOM Data Solutions, Irvine, today released its Year-End and Q4 2017 U.S. Home Sales Report, which shows that home sellers in Q4 2017 realized an average home price gain since purchase of $54,000, up from $53,732 in the previous quarter and up from $47,133 in Q4 2016 to the highest since Q3 2007 — a more than 10-year high.
That $54,000 average home seller profit represented an average 29.7% return on investment compared to the original purchase price, up from 28.8% in the previous quarter and up from 26.8% in Q4 2016 to the highest average home seller ROI since Q3 2007.
"It's the most profitable time to sell a home in more than 10 years yet homeowners are staying put longer than we've ever seen," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well."
Among 155 metropolitan statistical areas with sufficient historical data, those with the highest average home seller ROI were San Jose, California (90.9% ROI); San Francisco, California (73.3%); Merced, California (64.6%); Seattle, Washington (64.4%); and Santa Cruz, California (59.8%).
"The biggest story for the greater Seattle housing market in 2017 was persistently low inventory levels which continued to push home prices higher," said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. "Sales in King County dropped modestly, but that can be blamed on rising prices which are forcing many buyers to look in neighboring counties to the north and south of Seattle where homes are significantly less expensive. I expect more of the same in 2018; an ongoing shortage of inventory combined with an economy that continues to add jobs means the Seattle market will remain very competitive and increasingly expensive."
The U.S. median home price in 2017 was $235,000, up 8.3% from 2016 to a new all-time high. Annual home price appreciation in 2017 slowed slightly compared to the 8.5% in 2016.
Among 112 metropolitan statistical areas with a population of 200,000 or more and sufficient home price data, those with the biggest year-over-year increase in home prices were Ocala, Florida (up 14.3%); Kansas City, Missouri (up 13.4%); San Jose, California (up 13.3%); Salem, Oregon (up 12.9%); and Nashville, Tennessee (up 12.5%).
Along with Kansas City, San Jose and Nashville, other major metro areas with a population of at least 1 million with a double-digit%age increase in home prices in 2017 were Las Vegas (up 12.3%); Salt Lake City (up 10.9%); Seattle (up 10.8%); Orlando (up 10.7%); Tampa-St. Petersburg (up 10.7%); Portland (up 10.5%); and Jacksonville, Florida (up 10.1%).
64 of the 112 metros (57%) reached new record home price peaks in 2017, including Los Angeles, Dallas, Houston, Atlanta, and San Francisco.
"Southern California closed out 2017 with sales volume increases, providing sellers with a continued positive rate of return growth on their homeowner equity, and we are forecasting a further bullish market in 2018," said Michael Mahon, president of First Team Real Estate, covering the Southern California market. "Low available listing inventories, greater consumer cash flows from tax plan changes, continued gains in the stock market and continued declines in unemployment, are all contributing factors to high consumer confidence, which we believe will further elevate property values in 2018."
"Although Ohio continues to work through a long tail of lingering distress, strong buyer demand for both distressed and non-distressed properties pushed home prices to new all-time highs in the majority of markets across the state," said Matthew Watercutter, senior regional vice president and broker of record for HER Realtors, covering the Dayton, Columbus and Cincinnati markets in Ohio. "That strong buyer demand is evident in the increasing share of all-cash purchases statewide — more than one in three buyers in Ohio purchased with cash in 2017."
Homeowners who sold in the fourth quarter of 2017 had owned their homes an average of 8.18 years, up from 8.12 years in the previous quarter and up from 7.78 years in Q4 2016 to the longest average home seller tenure as far back as data is available, Q1 2000.
Counter to the national trend, 10 of the 108 metro areas analyzed in the report posted a year-over-year decrease in average home seller tenure: Norwich-New London, Connecticut (down 5%); Denver, Colorado (down 3%); Bremerton-Silverdale, Washington (down 2%); Eugene, Oregon (down 2%); Colorado Springs, Colorado (down 2%); Provo-Orem, Utah (down 2%); Dallas-Fort Worth, Texas (down 1%); Manchester-Nashua, New Hampshire (down 1%); Chattanooga, Tennessee (down less than 1%); and Santa Cruz, California (down less than 1%).
Nationwide all-cash purchases accounted for 29.0% of single family home and condo sales in 2017, up slightly from 28.7% in 2016 and still well above the pre-recession average of 20.3% between 2000 and 2007. The increase in cash sales share in 2017 followed four consecutive years of annual decreases.
Among 156 metropolitan statistical areas with a population of at least 200,000 and sufficient cash sales data, those with the highest share of all-cash purchases in 2017 were Mobile, Alabama (69.8%); Binghamton, New York(60.9%); Macon, Georgia (57.7%); and Columbus, Georgia (56.2%).
Distressed home sales — including bank-owned (REO) sales, third-party foreclosure auction sales, and short sales — accounted for 14.0% of all U.S. single family home and condo sales in 2017, down from 15.5% in 2016 and down from a peak of 38.6% in 2011.
Counter to the national trend, the share of distressed sales increased in 2017 in the District of Columbia (up 31%) and 12 states, including Delaware (up 21%); New Jersey (up 9%); Ohio (up 6%); Louisiana(up 19%); and New York (up 10%).
Among 203 metropolitan statistical areas with a population of at least 200,000 those with the highest share of distressed sales in 2017 were Atlantic City, New Jersey (39.4%); Mobile, Alabama (32.0%); Montgomery, Alabama (29.9%); Fayetteville, North Carolina (27.3%); and Akron, Ohio (25.3%).
Among 52 metropolitan statistical areas with a population of at least 1 million, those with the highest share of distressed sales in 2017 were Philadelphia, Pennsylvania (23.8%); Baltimore, Maryland (23.1%); Cleveland, Ohio (22.8%); Memphis, Tennessee (20.4%); and Columbus, Ohio (20.2%).
Institutional investors nationwide accounted for 2.6% of all single family home and condo sales in 2017, down from 3.0% in 2016.
Among 182 metropolitan statistical areas with a population of at least 200,000 and sufficient institutional investor sales data, those with the highest share of institutional investor sales in 2017 were Memphis, Tennessee (10.0%); Columbus, Georgia (8.6%); Birmingham, Alabama (8.3%); Killeen, Texas (7.3%); and Macon, Georgia (7.3%).
Nationwide buyers using Federal Housing Administration (FHA) loans accounted for 13.6% of all single family home and condo purchases in 2017, down from 15.4% in 2016 to the lowest level since 2014 but still well above the pre-recession average of 7.0% between 2000 and 2007.
Among 182 metropolitan statistical areas with a population of at least 200,000 and sufficient FHA buyer data, those with the highest share of FHA buyers in 2017 were El Paso, Texas (29.4%); Beaumont-Port Arthur, Texas (27.9%); Merced, California (27.2%); Elkhart-Goshen, Indiana (26.3%); and Salt Lake City, Utah (24.4%).
