Home sellers in Q4 2017 reaped an average home price gain since purchase of $54,000, the highest since Q3 2007, according to ATTOM Data Solutions’ Year-End and Q4 2017 U.S. Home Sales Report. In comparison, the average from the previous quarter was $53,732 in home seller profits and $47,133 in Q4 2016.
Compared to the original purchase price, the $54,000 average seller gain signifies an average 29.7 percent return on investment. This 29.7 percent return, the highest average home seller ROI since Q3 2007, is up from Q3 2017’s 28.8 percent average and Q4 2016’s 26.8 percent average.
“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,” says 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.”
With the exception of Seattle, Washington, the five cities with the highest average home seller ROI, among 155 metropolitan statistical areas with adequate historical data, were all located in California. The top five metro areas by home seller ROI were San Jose, California (90.0 percent ROI); San Francisco, California (73.3 percent); Merced, California (64.6 percent); Seattle, Washington (64.4 percent); and Santa Cruz, California (59.8 percent).
“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,” says 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.”
Regarding single-family home and condo purchases, other findings in ATTOM’s Data Solutions’ report include:
- An increase in cash sales share following four consecutive years of annual declines. Twenty-nine percent of sales in 2017 were all-cash purchases, up slightly from 28.7 percent in 2016.
- A drop in distressed sales share to a 10-year low. Fourteen percent of all sales in 2017 were distressed sales, down from 2016’s 15.5 percent and 2011’s 38.6 percent peak.
- A fall in FHA buyer share to its lowest level since 2014. Nationwide, 13.6 percent of all sales in 2017 were by buyers using Federal Housing Administration loans, down from 15.4 in 2016.