Home Sellers Profits Up in 2022, Despite Market Slowdown – RISMedia

Home sellers across the country earned $112,000 on a typical sale in 2022, up 21% from $92,500 in 2021 and up 78% from $63,000 two years ago, according to a new report from ATTOM.

ATTOM’s 2022 US Home Sales Report found that despite a market slowdown in the second half of last year, earnings rose from 2021 to 2022 in 98% of housing markets with enough data to analyze. The latest nationwide earnings figure, based on average purchase and resale prices, is the highest since at least 2008.

The report also found that a $112,000 gain on mid-price home sales represented a 51.4% return on investment compared to the original purchase price, up from 44.6% last year and from 32.8% in 2020. The latest profit margin also represented a high point since 2008 on the least.

the main points:

  • The median home price rose 10% in 2022, hitting another all-time annual high of $330,000. The full-year median home price rise fell below 17.6% nationally in 2021. Typical home prices reached new highs in 97% of metropolitan areas, including New York and New York. Los Angeles, California; Chicago, Illinois; and Dallas and Houston, Texas.
  • Average prices increased in all but two of the 157 metro areas with populations of 200,000 or more. Values ​​rose by at least 10% in 85 of those metropolitan areas (54%). Those with the largest year-over-year increase were in Florida, led by Naples (+26.9%), Fort Myers (+26.7%), Lakeland (+25.7%), Port St. Lucie (+24.6%) and Ocala (+23.8%).
  • The largest average price increase in metro areas with at least 1 million residents came in Tampa, FL (+21.9%); Raleigh, North Carolina (+17.9%); Austin, Texas (+17.9%); Orlando, Florida (+17.7%) and Tucson, Arizona (+17.2%).
  • Profit margins on typical home sales improved in 90% of metropolitan areas. It happened as the 10% jump in sales prices nationwide exceeded the 5% increases that sellers were paying when they originally bought their homes.
  • Nine of the 10 largest increases in investment returns were in Florida, led by Fort Myers (up from 51% to 85.4%), Ocala (up from 49.7% to 82.4%), Naples (up from 44.7% to 74.4%), and Port St. Lucie (up from 62.8% to 84.8%) and Miami (up from 42.9% from 64.1%).
  • Aside from Miami, the largest ROI gains were in metro areas with at least 1 million residents in Orlando, Florida (up from 42.2% to 62.2%); Tampa, Florida (up from 53.8% to 73.8%); Jacksonville, Florida (up from 43.7% to 58.4%) and Las Vegas, Nevada (up from 48.8% to 59.8%).
  • The largest decline in investment returns came in Salem, Oregon (down from 82.7% to 43.1%); Atlanta, Georgia (down from 43.9% to 36%); Boise, Idaho (down from 75.9% to 68.9%); Prescott, Arizona (down from 82.7% to 75.9%) and Sacramento, California (down from 61% to 54.7%).
  • Aside from Atlanta and Sacramento, metro areas with at least a million residents and declining profit margins in 2022 included Minneapolis, MN (down from 43.8% to 40%); Los Angeles, California (down from 48.2% to 45.2%) and San Francisco, California (from 75.2% to 72.8%).

Key takeaway:

ATTOM found that initial earnings for mid-priced home sales exceeded $100,000 in 50% of 157 metro areas. The Western Region scored 17 of the top 20 raw earners, led by San Jose, California ($621,000); San Francisco, California ($473,000); Seattle, WA ($304,063); San Diego, California ($295,500) and Los Angeles, California ($272,500). The lowest crude earnings were mainly in the South and Midwest, reflecting lower home prices in those areas than elsewhere. Those regions scored 19 of the 20 lowest-earning typical sales, led by Columbus, Georgia ($19,000); Shreveport, Louisiana ($20,000); Beaumont, Texas ($22,991); Rockford, Illinois ($34,500) and Davenport, Iowa ($38,500).

“It seems very likely that home sellers’ earnings peaked in this cycle in 2022,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “Mean rates have fallen on a monthly basis since mortgage rates doubled between January and October and are likely to fall further in many markets across the country in 2023, reducing profitability for home sellers.”

ATTOM also found that all cash purchases nationwide accounted for 36.1%, or one in three family home and apartment sales, in 2022. The latest percentage — the highest since 2013 — was up from 34.4% in 2021 and from 22.7% in 2020. 2020. Among those metropolitan areas with a population of at least 200,000 and sufficient cash sales data, those in which cash sales represented the largest share were Augusta, Georgia (72.1%); Columbus, Georgia (69%); Athens, Georgia (60.6%); Flint, Michigan (59.5%) and Gainesville, Georgia (58.9%).

“Money buyers — many of them, but not all of them are investors — are at a competitive advantage in today’s high interest rate environment, and will continue to command a higher-than-usual share of the market at least until mortgage rates drop a little lower. Affordability is an issue for many buyers – especially first-time buyers – and it wouldn’t be surprising to see an increase in the proportion of cash purchases already in 2023.”

For the full report, which includes data on home seller possession, lender-owned foreclosure purchases, and institutional investment, see click here.

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