The Year-End 2018 US Home Sales and Prices Report compiled and distributed by ATTOM Data Solutions was just released January 31. Three key take-aways from this report are
- Sellers realized an average home price gain of $61,000 since purchasing their house – the highest home price gain since 2006.
- Sellers realized a +32.6% return on investment (ROI) in 2018 compared to the home’s original sale price – again, the highest average ROI since 2006.
- The US median home price rose to an all-time high in 2018 at $248,000, up +5.5% from 2017.
“While 2018 was the most profitable time to sell a home in more than 12 years, those along the coasts reaped the most gains…” said Todd Teta, chief product officer with ATTOM. Teta went on to say, “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 slowing (although the Fed went unchanged at its most recent meeting the last week in January), so this could dampen the potential for home price gains in 2019.”
Among the 217 metros with populations more than 200,000, the highest ROIs in 2018 were almost exclusively on the West Coast:
- San Jose – +108.8%
- San Francisco – +78.8%
- Seattle – +70.7%
- Merced CA – +66.4%
- Santa Rosa CA +66.1%
Mathew Gardner, chief economist with Windermere Real Estate in the Seattle area, said, “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 metros with populations of 200,000 or more, the biggest home price increases were in
- Mobile AL – +21%
- Flint MI – +19%
- San Jose – +18.9%
- Atlantic City – +16.4%
- Las Vegas – +13.5%
Among metros with populations of at least one million, the biggest home price increases were in
- Grand Rapids – +10.6%
- San Francisco – +10.3%
- Columbus – +10.1%
- Atlanta – +10.1%
88 of the 127 metros (69%) with populations of + one million reached new record home price peaks. Among those metros were Los Angeles, Dallas- Fort Worth, Houston and Atlanta.
Homeownership tenure also reached record highs nationwide with an average of sellers “staying put” 8.3 years. This is the longest sellers tenure as far back as tenure data has been available in Q1 2000.
Nearly 3 in 10 buyers in 2018 paid all cash for single-family homes and condominiums in 2018, unchanged from 2017 but down from the paid-in-cash peak of 38.4% in 2011. Cash buyers in 2018 were well above the pre-recession average of 18.7% from 2000 – 2007.
The share of distressed sales (bank-owned REO sales, third party foreclosure auction sales and short sales) dropped to an 11-year low of 12.4%. This 12.4% is down from the peak share of 38.6% of distressed sales in 2011. Counter to this trend, distressed sales increased in Kansas, Louisiana, Wisconsin, Kentucky, Maine, Colorado and Indiana. Among the metros with populations of at least one million, the highest shares of distressed sales were in
- Philadelphia – +20.7%
- Baltimore – +19.9%
- Cleveland – +19.4%
- Memphis – +19.1%
- Providence – +18.3%
Institutional investors accounted for only 2.7% of all single-family and condominium sales. 2018 was the fifth straight year institutional investors curtailed their participation in the market. That being said, metros with populations of 200,000 or more that had the highest share of institutional investors were
- Montgomery AL – 9.6% of all sales
- Memphis TN – 8.1%
- Columbia SC – 7.6%
- Birmingham AL – 7.1%
- Atlanta GA – 7.0%
- Charlotte SC – 6.5%