fbpx

Q3 Homeowner Profits Surge: Why Now is a Good Time To Sell

October 23, 2020
Posted in Programs
October 23, 2020 derekevansteam

ATTOM Data Solutions’ third-quarter U.S. Home Sales Report shows that a typical homeowner who sold a home during the quarter had a gain of $85,000. This was $10,000 more than that realized by sellers in the previous quarter and up from $66,000 in the third quarter of 2019.

This typical home-sale profit represented a 38.6 percent return on investment (ROI) compared to the original purchase price. The typical ROI in the previous quarter was 37.5 percent and it was 33.7 percent a year ago.

The report says that both the raw-profit and return-on-investment figures were the highest since the U.S. economy began recovering from the Great Recession in 2012. They represent a continued increase even as the Coronavirus pandemic has damaged the economy and led to spikes in unemployment throughout the country this year.

The profit margins (difference between purchase and sales prices) were up year-over-year in 89 of the 103 metropolitan areas tracked by ATTOM. (Areas were included if they had at least 1,000 single-family home and condo sales during the quarter.) The largest increases were in the midsection of the country – larger cities in Missouri, Ohio, and Indiana. St. Louis, for example, saw profits margin rise to 37.1 percent from 22.4 percent. In Columbus, Ohio they jumped from 37.1 percent to 51.6 percent.

Rising profits are, of course, largely driven by price gains and, despite the economic fallout from the Coronavirus pandemic, prices did continue to climb nationwide. They tied with or set new peaks in 95 percent of the metro areas. The biggest year-over-year increases in median home prices came in the metro areas of Bridgeport (up 29.7 percent), Detroit (27.4 percent), New Haven, CT (20.1 percent), Birmingham (19.7 percent), and Indianapolis (19.3 percent).

Another factor in rising profits margins is the length of time the home is owned and homeowners who sold in the third quarter of 2020 had owned their homes an average of 8.13 years. This is up from 7.76 years in the second quarter and 7.91 a year earlier and is the longest average tenure since 2000.

If you’re ready to sell and you’d like to run the numbers, fill out the form below: