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Home Seller Average Profit in U.S. Hits Record High $65,500

Home Seller Average Profit in U.S. Hits Record High $65,500


According to ATTOM Data Solutions' Year-End 2019 U.S. Home Sales Report, home sellers nationwide in 2019 realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago. The latest profit figure, based on median purchase and resale prices, marked the highest level in the United States since 2006 - a 13-year high.

That $65,500 typical home seller profit represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006.

Both raw profits and ROI have improved nationwide for eight straight years. However, last year's gain in ROI - up less than three percentage points - was the smallest since 2011.

"The nation's housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing ever-greater challenges for buyers seeking bargains. In short, it was a great year to be a seller," said Todd Teta, chief product officer at ATTOM Data Solutions. "But there were signs that the market was losing some steam last year, as profits and profit margins increased at the slowest pace since 2011. While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season."

Among 220 metropolitan statistical areas with a population greater than 200,000 and sufficient historical sales data, those in western states continued to reap the highest returns on investments, with concentrations on or near the west coast. Metro areas with the highest home seller ROIs were in San Jose, CA (82.8 percent); San Francisco, CA (72.8 percent); Seattle, WA (65.6 percent); Merced, CA (63.2 percent) and Salem, OR (62.1 percent). The top four in 2019 were the same areas that topped the list in 2018.

South Bend and Boise lead major metros in home price appreciation

The U.S. median home price increased 6.2 percent in 2019, hitting an all-time high of $258,000. The annual home-price appreciation in 2019 topped the 4.5 percent rise in 2018 compared to 2017, but was down from the 7.1 percent increase in 2017 compared to 2016.

Among 134 metropolitan statistical areas with a population of 200,000 or more and sufficient home price data, those with the biggest year-over-year increases in median home prices were South Bend, IN (up 18.4 percent); Boise City, ID (up 12.6 percent); Spokane, WA (up 10.9 percent); Atlantic City, NJ (up 10.6 percent) and Salt Lake City, UT (up 9.6 percent).

Along with Salt Lake City, other major metro areas with a population of at least 1 million and at least an 8 percent annual increase in home prices in 2019 were Grand Rapids, MI (up 8.9 percent) and Columbus, OH (up 8.3 percent).

Home prices in 2019 reached new peaks in 105 of the 134 metros (78 percent), including Los Angeles, Dallas-Fort Worth, Houston, Washington, D.C., and Philadelphia.

Homeownership tenure at new record high nationwide, but down in many areas

Homeowners who sold in the fourth quarter of 2019 had owned their homes an average of 8.21 years, up from 8.08 years in the previous quarter and up from 7.95 years in the fourth quarter of 2018. The latest figure represented the longest average home seller tenure since the first quarter of 2000, the earliest period in which data is available.

Among 108 metro areas with a population of at least 200,000 and sufficient data, the top five tenures for home sellers in the fourth quarter of 2019 were all in Connecticut: Norwich, CT (13.49 years); New Haven, CT (13.32 years) Bridgeport-Stamford, CT (13.23 years); Torrington, CT (12.33 years) and Hartford, CT (12.25 years).

Counter to the national trend, 45 of the 108 metro areas (42 percent) posted a year-over-year decrease in average home-seller tenure, including Colorado Springs, CO (down 9 percent); Modesto, CA (down 7 percent); Visalia, CA (down 5 percent); Oklahoma City, OK (down 5 percent) and Olympia, WA (down 5 percent).

A quarter of home buyers made all-cash purchases in 2019

Nationwide, all-cash purchases accounted for 25.3 percent of single-family home and condo sales in 2019, the lowest level since 2007. The latest figure was down from 27.0 percent in 2018 and 27.7 percent in 2017, and well off the 38.4 percent peaks in 2011 and 2012. However, this is still well above the pre-recession average of 18.7 percent between 2000 and 2007.

Among 166 metropolitan statistical areas with a population of at least 200,000 and sufficient cash-sales data, those where cash sales represented the largest share of all transactions in 2019 were Macon, GA (51.1 percent of sales); Naples, FL (50.4 percent); Chico, CA (47.9 percent); Montgomery, AL (44.7 percent) and Fort Smith, OK (43.8 percent).

U.S. distressed sales share drops to 13-year low, but rises in eight states

Distressed home sales -- including bank-owned (REO) sales, third-party foreclosure auction sales, and short sales -- accounted for 11.5 percent of all U.S. single family home and condo sales in 2019, down from 12.4 percent in 2018 and from a peak of 38.8 percent in 2011. The latest figure marked the lowest point since 2006.

States where distressed sales comprised the largest portion of total sales in 2019 were all in the Northeast or Mid-Atlantic regions: New Jersey (20.1 percent of sales), Connecticut (19.5 percent), Delaware (19.4 percent), Maryland (18.1 percent) and Rhode Island (17.6 percent).

Among 204 metropolitan statistical areas with a population of at least 200,000 and with sufficient data, those where distressed sales represented the largest portion of all sales in 2019 were Atlantic City, NJ (26.9 percent of sales); Columbus, GA (22.6 percent); Trenton, NJ (22.1 percent); Norwich, CT (21.6 percent) and Peoria, IL (20.0 percent).

Those with the smallest shares were Portland, ME (3.3 percent of sales); Ogden, UT (3.8 percent); Provo, UT (4.1 percent); Salt Lake City, UT (4.6 percent) and San Francisco, CA (4.6 percent).

Among 53 metropolitan statistical areas with a population of at least 1 million, those with the highest levels of distressed sales in 2019 were Baltimore, MD (19.3 percent of sales); Hartford, CT (18.9 percent); Philadelphia, PA (18.1 percent); Cleveland, OH (17.9 percent) and Providence, RI (17.7 percent).

Aside from San Francisco and Salt Lake City, metros with at least 1 million people that had the lowest shares, were San Jose, CA (5.2 percent of sales); Austin, TX (5.7 percent) and Grand Rapids, MI (6.2 percent).

Institutional investors dropped for the third straight year

Institutional investors nationwide accounted for 2.9 percent of all single-family home and condo sales in 2019, down from 3.0 percent in 2018 to the lowest point since 2015.

Among 120 metropolitan statistical areas with a population of at least 200,000 and sufficient institutional-investor sales data, those with the highest levels of institutional-investor transactions in 2019 were Atlanta, GA (9.5 percent of sales); Charlotte, NC (8.6 percent); Lafayette, LA (8.4 percent); Memphis, TN (8.3 percent) and Raleigh, NC (7.8 percent).

Texas metro areas continue to dominate list with the highest levels of FHA loans

Nationwide, buyers using Federal Housing Administration (FHA) loans accounted for 11.9 percent of all single-family home and condo purchases in 2019, up from 10.6 percent in 2018. The increase marked the first rise since 2015.

Among 197 metropolitan statistical areas with a population of at least 200,000 and sufficient FHA- buyer data, the top four with the highest share of purchases made with FHA loans were in Texas. Those with the highest levels of FHA buyers in 2019 were McAllen, TX (30.4 percent of sales); El Paso, TX (26 percent); Amarillo, TX (24.4 percent); Beaumont-Port Arthur, TX (23.7 percent) and Visalia, CA (23.5 percent). The four Texas metros were the same that led the list in 2018.

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