By Clare Trapasso-realtor.com
You've heard it all before: It's a home seller's market out
there. Need proof? In the second quarter of 2017, sellers raked in an
additional average of $51,000 per sale over what they originally paid for their
abodes.
That's
the highest returns the residential housing market has seen in a
decade, according to a recent report from real estate information firm
ATTOM Data Solutions. The sale price is about 26% more than
owners originally spent on the property, the study showed. The last time
it was this high was in early 2007, when sellers pocketed an average $57,000.
Break
out the bubbly, home sellers!
ATTOM looked at recorded sales deeds, foreclosure filings,
and loan data to compile the report.
The
biggest profits were in places where prices are the highest. Sellers
made returns of about 75% in Silicon Valley's San Jose, CA; 65% in San
Francisco; 63% in Seattle; 62% in Modesto, CA; and 62% in Denver. This was
based on metros with at least 1,000 home sales and sales data
were available going back to 2000.
"Those are areas that have seen the biggest gain in home
prices during this recovery," says Daren Blomquist,
ATTOM's senior vice president. "Modesto was a little bit of a
surprise—it was one of the epicenters of the foreclosure crisis. [But] the halo
effect of the Bay Area is rippling out to markets like Modesto and several
others in central California and boosting home prices."
Where are homeowners staying the longest—and
leaving the fastest?
Despite—or
perhaps because of—the high prices, homeowners stayed an average 8.05 years in
their abodes nationally That's the longest it's been since the start of
the survey, in 2000. And it's because homeowners, while they might have no
trouble selling their
current property, still need to buy a new property.
"It's
not so easy to find a new home to purchase," Blomquist says. "There's
not a lot of homes on the market to buy."
Homeowners
stayed the longest in their places in Boston, at 11.91 years; Hartford,
CT, at 11.9 years; Providence, RI, at 10.28 years; San Francisco, at 9.7 years;
and San Jose, at 9.71 years. ATTOM looked only at metros with at least 1
million residents for this list.
But
in some other parts of the U.S., people seemed eager to pull up stakes and
leave. The amount of time homeowners stayed in their homes dropped in certain
high-profile metros, including Chicago; Dallas; Philadelphia; Washington, DC;
and Detroit.
Where can investors—and everyone else—find
real estate bargains?
In
today's soaring housing market, sales of distressed properties such as
foreclosures, short sales, and bank-owned sales have dropped to the lowest
levels since the third quarter of 2007. They made up only about 13.4% of all
condo and single-family home sales in the second quarter.
"Rising
home equity lifts all boats," says Blomquist. "It allows more
homeowners to avoid foreclosure. They have enough equity to sell or potentially
refinance and lower their payments."
The
greatest percentage of distressed properties were in Atlantic City, NJ, at
40.2% of all home sales; Canton, OH, at 31%; Columbus, GA, at 27.8%; Trenton,
NJ, at 27.7%; and Akron, OH, at 27.5%. ATTOM looked at metros with at
least 200,000 residents and a minimum of 100 distressed sales to compile the
list.
Atlantic
City's top placement on the foreclosure list is partly due to the
area's high unemployment rate—about 7.7% as of May. It was 4.4% nationally
that month, according to the U.S. Bureau of Labor Statistics.
"We're
no longer in the paradigm where it's toxic loans that are primarily causing
foreclosures," Blomquist says. "Job loss and wage loss is driving
foreclosures today."
The
lack of distressed properties is pushing investors seeking a deal to set their
sights on more far-flung markets to buy into.
"They're
moving to smaller, more off-the-beaten-path markets that are lower-priced
still," Blomquist says. Plus, "there's less competition from other
investors."
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