ATTOM Data Solutions released its Q2 2017 U.S. Home Sales Report July 27, 2017, which shows that homeowners who sold in the second quarter realized an average price gain of $51,000 since purchase, the highest average price gain for home sellers since Q2 2007, when it was $57,000.
The average home seller price gain represented an average return of 26 percent on the previous purchase price of the home, the highest average home seller return since Q3 2007, when it was 27 percent.
The report also shows that homeowners who sold in the second quarter had owned an average of 8.05 years, up from 7.85 years in the previous quarter and up from 7.59 years in Q2 2016 to the longest average homeownership tenure as far back as data is available, Q1 2000.
“Potential home sellers in today’s market are caught in a Catch-22. While it’s the most profitable time to sell in a decade, it’s also extremely difficult to find another home to purchase, which is helping to keep homeowners in their homes longer before selling,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “And the market is becoming even more competitive, with the share of cash buyers in the second quarter increasing annually for the first time in four years.”
Cash Sales Share Increases Annually for First Time Since Q1 2013
All-cash sales represented 28.9 percent of all single family and condo sales in Q2 2017, down from 31.3 percent of all sales in the first quarter, but up from 27.3 percent of all sales in Q2 2016. The first annual increase in the share of cash sales since Q1 2013.
Among major metropolitan areas with a population of at least 1 million, those with the highest share of all-cash sales in Q2 2017 were Raleigh, North Carolina (57.4 percent); Miami (46.2 percent); Detroit (45.2 percent); Oklahoma City (44.6 percent); and Tampa-St. Petersburg, Florida (43.2 percent).
Institutional Investor Sales Share Down Nationwide
The share of U.S. single-family home and condo sales sold to institutional investors (entities buying at least 10 properties in a calendar year) was 2.1 percent in the second quarter, up from 1.8 percent in the first quarter but down from 2.6 percent a year ago.
Among 73 metropolitan statistical areas with a population of at least 200,000 and at least 40 institutional investor sales in Q2 2017, those with the highest share of institutional investor sales in the second quarter were; Macon, Georgia (8.9 percent); Memphis, Tennessee (8.6 percent); Killeen-Temple, Texas (8.3 percent); Clarksville, Tennessee (7.8 percent); and Birmingham, Alabama (7.4 percent).
Counter to the national trend, 19 of the 73 metro areas (26 percent) posted year-over-year increases in the share of institutional investor purchases, including Memphis, Tennessee (up 6 percent); Charlotte, North Carolina (up 6 percent); Nashville, Tennessee (up 37 percent); Baltimore, Maryland (up 3 percent); and Raleigh, North Carolina (up 42 percent).
Highest Average Home Seller Returns
Among 118 metropolitan statistical areas with at least 1,000 home sales in Q2 2017 with previous sale information available, those with the highest average home seller returns were San Jose, California (75 percent); San Francisco, California (65 percent); Seattle, Washington (63 percent); Modesto, California (62 percent); and Denver, Colorado (62 percent).
“An ongoing issue in the greater Seattle area is a lack of supply which is aggressively driving up home prices,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “The only short-term solution is to build more homes, but thanks to land constraints and construction costs, this simply is not happening at a rate that you would normally expect in a market like this. Unfortunately, I do not expect this trend to change until zoning and regulation costs change, which is unlikely in the current political climate.”
Average Homeownership Tenure Down
Counter to the national trend, the average homeownership tenure in Q2 2017 decreased from a year ago in 25 of 89 metro areas analyzed in the report (28 percent), including Chicago, Dallas, Philadelphia, Washington, D.C., and Detroit.
“Across Southern California we are witnessing concerns over housing affordability keeping homeowners in current homes for longer tenure, and keeping available home inventories low in supply.” said Michael Mahon, president at First Team Real Estate covering the Southern California market.
Among major metropolitan areas with a population of at least 1 million, those with the longest average homeownership tenure for home sellers who sold in the second quarter were Boston, Massachusetts (11.91 years); Hartford, Connecticut (11.90 years); Providence, Rhode Island (10.28 years); San Francisco, California (9.87 years); and San Jose, California (9.71 years).
Distressed Sale Share Drops to Lowest Level Since Q3 2007
Total distressed sales, bank-owned (REO) sales, third-party foreclosure auction sales, and short sales, accounted for 13.4 percent of all single-family and condo sales in Q2 2017, down from 17.1 percent in the first quarter and down from 15.2 percent in Q2 2016 to the lowest level since Q3 2007.
Among 141 metropolitan statistical areas with a population of at least 200,000 and at least 100 total distressed sales in Q2 2017, those with the highest share of total distressed sales were Atlantic City, New Jersey (40.2 percent); Canton, Ohio (31.0 percent); Columbus, Georgia (27.8 percent); Trenton, New Jersey (27.7 percent); and Akron, Ohio (27.5 percent).
Counter to the national trend, 39 of the 141 metro areas (28 percent) posted year-over-year increases in share of distressed sales, including New York, New York (up 13 percent); Denver, Colorado (up 3 percent); Pittsburgh, Pennsylvania (up 31 percent); Cincinnati, Ohio (up 19 percent); and Cleveland, Ohio (up 5 percent).
FHA Buyer Share Drops to Lowest Level in More Than Two Years
Sales to FHA buyers (typically first-time homebuyers or other buyers with a low down payment) represented 14.3 percent of all U.S. single-family and condo sales in Q2 2017, down from 14.4 percent of all sales in the first quarter and down from 16.0 percent in Q2 2016 to the lowest level since Q1 2015.
Among metro areas with a population of at least 1 million, those with the highest share of sales to FHA buyers were Kansas City (25.0 percent); Salt Lake City (24.5 percent); Indianapolis (24.5 percent); Houston (23.9 percent); and San Antonio (23.6 percent).
All-cash purchase: sale where no loan is recorded at the time of sale and where ATTOM has coverage of loan data.
Homeownership tenure: for a given market and given quarter, the average time between the most recent sale date and the previous sale date, expressed in years.
Home seller price gains: the difference between the median sales price of homes in a given market in a given quarter and the median sales price of the previous sale of those same homes, expressed both in a dollar amount and as a percentage of the previous median sales price.
Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in a calendar year.
REO sale: a sale of a property that occurs while the property is actively bank owned (REO).
Short sale: a sale of a property where the sale price is less than (short) the combined amount of loans secured by the property.
Third-party foreclosure auction sale: a sale of a property that occurs at the public foreclosure auction (trustee’s sale or sheriff’s sale) in which the property is sold to a third-party buyer and does not transfer back to the foreclosing bank.
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About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. residential and commercial properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers and the media in multiple ways, including bulk file licenses, APIs and customized reports.
The ATTOM Data Solutions U.S. Home Sales Report provides percentages of distressed sales and all sales that are sold to investors, institutional investors and cash buyers, a state and metropolitan statistical area. Data is also available at the county and zip code level upon request. The data is derived from recorded sales deeds, foreclosure filings and loan data. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available.