Now is a great time to be a homeowner in the United States. This is especially true if you are looking to sell your home. The current housing shortage has driven these high returns for homeowners. In fact, homeowners are receiving some of the highest returns in over a decade.
According to ATTOM Data Solutions, average profits for home sellers reached a 10-year high in 2017. In the fourth quarter of last year, home sellers saw an average price gain of $54,000 since they purchased their homes. That amounts to a 29.7 percent average gain.
ATTOM was able to acquire this data by comparing “median home prices in the last quieter of the year to just over 8 years ago (the average amount of time owners stay in their homes before selling,” according to the article “Home Sellers Are Really Cashing In These Days, Report Finds.” It also analyzed “recorded sales deeds, foreclosure filings, and loan data for its report. Only Metro with sufficient historical data and large enough population, mostly 200,000 and up, were included.”
Certain areas of the country are reaping the most benefits from the current housing market. With high demand and low supply, homeowners are raking in big returns. The areas where this is the most evident can be found on the West Coast.
According to the article “Where home seller profits are the greatest in the U.S.,” the highest average seller returns were in San Jose (90.9 percent); San Francisco (73.3 percent); Merced, Calif. (64.6 percent); Seattle (64.4 percent); and Santa Cruz, Calif. (59.8 percent).”
However, this trend does not translate to all homeowners. At the same time, many people are staying put in the homes they are currently living in. The same features that are driving the high returns for sellers are also acting as a barrier for those that want to trade up or move into a larger home in the area they are currently living.
Since the start of such data collection in 2000, the average home sellers at the last quarter of the year had stayed in their homes for 8.18 years. This is up from 8.12 years the previous quarter, as well as a whole point the year before.
Along with this roadblock for would-be home sellers is another challenge — a strong economy driving cash sales. Certain metro areas like Mobile, Ala., saw high levels of all cash transactions. For example, 29 percent of single-family homes and condo sales in 2017 were made with all cash. This has made home buying more difficult for it makes the competition about who has the most cash. These individuals are often the ones that win.
Although the benefits are there for home sellers right now when you consider the hot market, there are still challenges for homeowners to overcome. Having the ability to get a big return on your home is great, but you would hope it would translate into your next purchase. One thing to watch closely is how this coastal trend spreads to the inner parts of the country.