U.S. single family homes and condos sold for a median price of $255,000 in the second quarter, up 6.3% from a year ago to a new all-time high but the slowest annual appreciation since Q2 2016, according to the ATTOM Data Solutions Q2 2018 U.S. Home Sales Report out Thursday.
“Annual home price appreciation nationwide has now slowed for five consecutive quarters following a post-election spike to double-digit appreciation in the first quarter of 2017,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Although home sellers are still in the driver’s seat of this housing market, moderating home price appreciation is good news for prospective home buyers and signals that rising mortgage rates and other housing headwinds are cooling red-hot home price appreciation in some areas.”
Annual home price appreciation in Q2 2018 decelerated from the previous quarter in 80 of the 122 metros (66%) analyzed for median home prices, including Los Angeles, Chicago, Dallas-Fort Worth, Houston and Philadelphia.
Counter to the national trend, annual home price appreciation accelerated from the previous quarter in 42 of the 122 metros analyzed (34%), including New York, Washington, D.C., Boston, San Francisco and Detroit.
The median price per square foot for homes that sold for $1 million or more in the second quarter increased 5.4% from a year ago, accelerating from 3.2% annual appreciation in the previous quarter and from 3.4% annual appreciation in Q2 2017.
The median price per square foot for homes that sold for under $1 million in the first quarter increased 6.5% from a year ago, but that was down from 8.2% annual appreciation in the previous quarter and down from 9.0% annual appreciation in Q2 2017.
In 49 counties with at least 100 single family and condo sales above $1 million in Q2 2018, median price per square foot appreciation accelerated compared to a year ago in the above-$1 million category in 32 of those counties (65%), including Santa Clara County (San Jose), California; Orange County, California; King County (Seattle), Washington; Alameda County (San Francisco), California; and San Diego County, California.
Median price per square foot appreciation decelerated compared to a year ago in the above-$1 million category in 17 of the 49 counties (35%) with at least 100 single family home and condo sales above $1 million in Q2 2018, including Los Angeles County, California; Miami-Dade County, Florida; Marin County (San Francisco area), California; Maricopa County (Phoenix), Arizona; and New York County (Manhattan), New York.
Among 122 metropolitan statistical areas analyzed in the report, those with the biggest year-over-year increase in median prices were San Jose, California (up 25.0%); Flint, Michigan (up 23.7%); Seattle, Washington (up 14.3%); Boise, Idaho (up 14.3%); and San Francisco, California (up 14.2%).
“Home prices in the greater Seattle region continue to grow at well above long-term averages for several reasons,” said Matthew Gardner, chief economist with Windermere Real Estate, covering the Seattle market. “Firstly, the area’s booming economy continues to add jobs, driving up demand for housing. Compounding this demand is a lack of new construction housing, which puts substantial upward pressure on home prices in the resale market. Housing affordability is unquestionably a major issue in Seattle; however, ironically enough, the many California buyers relocating to the Seattle area actually think our home prices are a bargain!”
The U.S. median home price of $255,000 in Q2 2018 was 6% above the pre-recession peak of $241,648 in Q3 2005.
Median home prices in 79 of the 122 metro areas analyzed for median home prices in the report (65%) were above their pre-recession peaks in Q2 2018, led by Houston, Texas (79% above); Dallas-Fort Worth (78% above); Greeley, Colorado (76% above); Denver, Colorado (75% above); and San Antonio, Texas (68% above).
Median home prices in Q2 2018 were still below pre-recession peaks in 43 of the 122 metros analyzed for median home prices (35%), led by Atlantic City, New Jersey (36% below); York, Pennsylvania (34% below); Salisbury, Maryland (21% below); Naples, Florida (19% below); and Trenton, New Jersey (18% below).
Homeowners who sold in Q2 2018 had owned their homes for an average of 8.09 years, up from an average homeownership tenure of 7.91 years in Q1 2018 and up from an average homeownership tenure of 7.83 years in Q2 2017.
Counter to the national trend, average homeownership tenure declined in 22 of 108 (20%) metropolitan statistical areas analyzed for homeownership tenure, including Sacramento, California; Nashville, Tennessee; Salt Lake City, Utah; Honolulu, Hawaii; and New Haven, Connecticut.
Homeowners who sold in Q2 2018 sold for an average of $58,000 more than their original purchase price, the highest average home seller price gain since Q3 2007.
The $58,000 average home seller price gain in Q2 2018 represented an average 30.2% return on the original purchase price, up from an average 28.9% return in the first quarter but down from a recent peak of 30.8% in Q4 2017.
Among 147 metropolitan statistical areas analyzed for average home seller gains, those with the highest average%age gain were San Jose, California (116.6%); San Francisco, California (85.0%); Seattle, Washington (76.5%); Boston, Massachusetts (64.3%); and Portland, Oregon (62.1%).
Distressed sales — sales of bank-owned homes, short sales, and sales to third-party investors at foreclosure auction — accounted for 11.9% of all single family home and condo sales in Q2 2018, down from 14.9% in the previous quarter and down from 13.5% in Q2 2017 to the lowest level since Q2 2007, an 11-year low.
States with the highest share of distressed sales in Q2 2018 were New Jersey (23.9%), Delaware (22.5%), Rhode Island (18.6%), Connecticut (17.6%), and Illinois (17.3%).
Among 148 metropolitan statistical areas analyzed for distressed sales, those with the highest share in Q2 2018 were Atlantic City, New Jersey (42.1%); Trenton, New Jersey (26.0%); Youngstown, Ohio (25.4%); Syracuse, New York (24.8%); and Hagerstown, Maryland (22.1%).
Among 52 metro areas with a population of 1 million or more, those with the highest share of distressed sales in Q2 2018 were Baltimore, Maryland (20.7%); Philadelphia, Pennsylvania (20.2%); New York-Newark-Jersey City (20.0%); Cleveland, Ohio (19.0%); and Providence, Rhode Island (18.7%).
Among other findings:
• Sales to buyers using FHA loans — typically first-time home buyers — accounted for 10.7% of all sales of single family homes and condos in Q2 2018, down from 11.9% in the previous quarter and down from 14.0% in Q2 2017 to the lowest level since Q1 2008 — a more than 10-year low.
• All-cash purchases accounted for 27.2% of all single family home and condo sales in Q2 2018, down from 28.8% in the previous quarter and down from 27.6% in Q2 2017 to the lowest level since Q3 2016.
• Sales to institutional investors (entities buying at least 10 properties in a calendar year) accounted for 2.0% of all single family home and condo sales in Q2 2018, up from 1.9% in the previous quarter but still down from 2.3% in Q2 2017.
