Home seller profits increased for three years in a row, rising to $65,500 in 2019

by Marian McPherson |

January 22, 2020

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Despite home price growth softening in some of the nation’s most expensive markets, it’s still a seller’s market according to an Attom Data Solutions report released on Thursday.

The average homeowner who sold their home in 2019 experienced a home price gain of $65,500 — representing a whopping 34 percent return on investment compared to the original purchase price.

For the past two years, homeowners have been experiencing record home price gains, with returns on investment growing from $50,027 in 2017 to $58,100 in 2018.

“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 Attom Chief Product Officer Todd Teta in a prepared statement.

Sellers in San Jose, California (82.8 percent); San Francisco, California (72.8 percent); Seattle, Washington (65.6 percent); Merced, California (63.2 percent) and Salem, Oregon (62.1 percent) experienced the greatest returns on investment for the second consecutive year.

However, the largest increases in median home price growth happened in secondary markets across the West and Midwest. South Bend, Indiana, led the way with an 18.4 percent jump in median home prices, followed by Boise City, Idaho (up 12.6 percent); Spokane, Washington (10.9 percent); Atlantic City, New Jersey (10.6 percent) and Salt Lake City, Utah (9.6 percent).

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

Despite the opportunity for sizable returns on investment, homeowners are staying in their homes longer than before with average tenures rising from 8.08 years in Q3 2019 to 8.21 years in Q4 2019 — the longest average tenure seen since Q1 2000.

Homeowners along the East Coast are staying in place in the longest with tenures as long as 13.49 years (Norwich, Connecticut). Meanwhile, homeowners in up-and-coming markets across the South and West are taking advantage of renewed buyer interest with tenures as short as 5 years (Oklahoma City, Oklahoma).

All-cash purchases dropped to their lowest level since 2007 (25.3 percent), as more buyers have begun taking advantage of low interest rates and FHA loans (11.9 percent).

However, Teta said a slowdown may be on the horizon as home price growth slows and buyers gain more leverage to negotiate home prices.

“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,” he said. “While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season.”