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Seller ROI Hits Highest Point Since 2007

The typical U.S. home seller gets a 24 percent return on their investment, according to the Q1 2017 U.S. Home Sales Report released by ATTOM Data Solutions on Thursday. That amounts to about $44,000 per sale—the highest gain for home sellers since mid-2007.

But while ROI is up, the average homeowner tenure is down slightly for the quarter. Sellers in Q1 of this year owned their properties for 7.97 years, a dip from the eight years of home sellers in Q4 2016—the record-high for home seller tenure. Still, despite the slight decrease, tenure is largely up according to historical standards. Between 2000 and 2007, homeownership tenure averaged just over four years.

Though home seller gains are on the up and up, many homeowners simply aren’t ready to sell, and that’s causing the market’s ever-worsening inventory problem, according to Daren Blomquist, Senior Vice President for ATTOM Data Solutions.

“The first quarter of 2017 was the most profitable time to be a home seller in nearly a decade, and yet homeowners are continuing to stay put in their homes longer before selling,” Blomquist said. “This counterintuitive combination is in part the result of the low inventory of move-up homes available for current homeowners, while also perpetuating the scarcity of starter homes available for first-time homebuyers.”

All hope isn’t lost, though, according to Blomquist. At a metro level, there are some promising signs that inventory may be loosening up.

“There are some early signs this inventory logjam may be loosening up in some markets,” Blomquist said, “with the average homeownership tenure down from a year ago in nine of the 66 markets we analyzed, including Memphis, Dallas, Boston, Portland, and Tampa. Sky-high potential price gains may be finally prompting more homeowners to sell.”

The biggest markets for these “sky-high” ROIs? Those are along the Pacific coast. According to Q1 data, the top home seller gains occurred in San Jose, California ($365,500 per sale); San Francisco ($276,750); Los Angeles ($187,000); Honolulu ($161,110); and Oxnard-Thousand Oaks-Venture, California ($160,000).

As a percent of the purchase price, the highest gains were in San Jose (71 percent ROI); San Francisco (65 percent); Seattle, Washington (56 percent); Portland, Oregon (52 percent); and Modesto, California (51 percent). In six markets, sellers saw a loss upon the sale of their home. These included Baton Rouge, Louisiana; Milwaukee, Wisconsin; Columbia, South Carolina; Winston-Salem, North Carolina; and August, Georgia.

The Q1 report also found that cash sales dropped over the year, as did overall foreclosure sales. Read the full report at RealtyTrac.com.

 

About Author: Aly J. Yale

Aly J. Yale is a longtime writer and editor from Texas. Her resume boasts positions with The Dallas Morning News, NBC, PBS, and various other regional and national publications. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.
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