Home sellers enjoyed record-breaking gains in 2018 for average home price returns since purchase, according to ATTOM Data Solutions.
In 2018, home sellers saw an average home price gain since purchase of $61,000, up from $50,000 in 2017 and up from $39,500 in 2016, according to ATTOM. The U.S. median home price in 2018 up 5.5 percent from 2017 to $248,000, which is an all-time high. Annual home price appreciation in 2018, however, slowed compared to 7.1 percent in 2017, ATTOM’s Year-End 2018 U.S. Home Sales Report found.
The $61,000 average home price gain — which was an average 32.6 percent return on investment compared to the original purchase price — is the highest level since 2006.
“While 2018 was the most profitable time to sell a home in more than 12 years, those along the coasts, reaped the most gains. However, those are the same areas where homeowners are staying put longer,” said Todd Teta, chief product officer at ATTOM. “The economy is still going strong and home loan rates remain historically low. But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place and mortgage rates are ticking up ever so slowly, so this could dampen the potential for home price gains in 2019.”
Among 217 metro areas with a population greater than 200,000 and sufficient historical data, the highest returns on investment were almost entirely in western states, and particularly in California, according to ATTOM.
The highest average home seller returns were San Jose, California (108.8 percent); San Francisco, California (78.6 percent); Seattle, Washington (70.7 percent); Merced, California (66.4 percent); and Santa Rosa, California (66.1 percent).
“Home price growth in the Seattle area has started to soften, something that home buyers have been waiting for, and a trend that we can expect to continue in the coming year,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “Seattle is still benefitting from buyers moving here from more expensive markets, such as California, but the market cannot solely depend on this demographic. My forecast for 2019 is that it will be a year of movement back to balance, which is a very positive thing.”
Among 127 metro areas with more than 200,000 people, those with the biggest year-over-year increase in home prices were Mobile, Alabama (up 21 percent); Flint, Michigan (up 19 percent); San Jose, California (up 18.9 percent); Atlantic City, New Jersey (up 16.4 percent) and Las Vegas, Nevada (up 13.5 percent).
Other metro areas with at least 1 million people in 2018 were Grand Rapids, Michigan (up 10.6 percent); San Francisco, California (up 10.3 percent); Columbus, Ohio (up 10.1 percent); and Atlanta, Georgia (up 10.1 percent).
For more from the ATTOM report, click here.
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