RealtyTrac: Home Sellers See Highest Price Gains Since 2007

Sorohan, Mike msorohan@mba.org 

April 22, 2016


RealtyTrac, Irvine, Calif., said housing data from March and the first quarter showed home sellers are seeing the highest average price gains since the start of the Great Recession.

The company's March and Q1 Home Sales Report said U.S. home sellers in March on average sold for $30,500 more than they purchased, a 17 percent average gain in price and the highest average price gain for home sellers in any month since December 2007.

Among 125 metropolitan statistical areas with at least 300 sales in March, home sellers realized biggest average gains compared to purchase price in San Francisco (72 percent average gain); San Jose, Calif. (60 percent); Boulder, Colo. (53 percent); Prescott, Ariz. (51 percent); and Los Angeles (48 percent).

"Home sellers in many markets are now seeing average price gains close to or above what home sellers experienced during the last housing boom," said RealtyTrac Senior Vice President Daren Blomquist. "That should encourage more homeowners to take advantage of the prime seller's market and list their homes for sale this year. Banks are already taking advantage of that market as evidenced by the uptick in the distressed sales share over the last two quarters."

Other markets with average seller gains more than twice the national average in March were Denver (42 percent); Portland (40 percent); Austin, Texas (40 percent); Seattle (38 percent); Baltimore (38 percent); Riverside-San Bernardino, Calif. (37 percent); San Diego (36 percent); and Sacramento (35 percent).

"Given that bank-owned homes are selling at a median price that is 40 percent below the overall median sales price nationwide, the uptick in distressed sales combined with affordability constraints are contributing to faltering home price appreciation in some markets--most notably the bellwether markets of Washington, D.C. and San Francisco," Blomquist said.

RealtyTrac reported 19 markets (15 percent) where home sellers in March on average sold for less than what they purchased for, led by Rockford, Ill. (11 percent average loss compared to purchase price); Winston-Salem, N.C. (10 percent average loss); Cleveland, Ohio (8 percent average loss); Columbia, S.C. (7 percent average loss); and Wilmington, N.C. (5 percent average loss). Other markets with average seller losses in March included Memphis (4 percent average loss); Milwaukee (4 percent average loss); Chicago (3 percent average loss); Cincinnati (3 percent average loss); Birmingham, Ala. (2 percent average loss); and Flint, Mich. (1 percent average loss).

Home sellers who sold in March on average had owned for 7.67 years, up 4 percent from an average of 7.37 years for home sellers who sold in March 2015.

The report said the median sales price of single family homes and condos in March rose to $210,000, up 9 percent from the previous month and up 11 percent from a year ago. March was the 49th consecutive month with a year-over-year increase in the U.S. median home price, which is still 8 percent below its previous peak of $228,000 in July 2005.

Among metro areas analyzed in the report, 36 percent reached new home price peaks since January 2015, including seven markets that reached new price peaks in March 2016: Boulder; Denver; Portland; Fort Collins, Colo.; Austin, Texas; Greeley, Colo.; and Cincinnati.

Counter to the national trend, 17 percent of markets analyzed posted a year-over-year decrease in median home sales price in March, including Washington, D.C. (down 7 percent); San Francisco (down 2 percent following 47 consecutive months of increases); Baltimore (down 6 percent); Pittsburgh (down 4 percent following 21 consecutive months of increases); Virginia Beach (down 2 percent); Birmingham (down 5 percent); and Tulsa, Okla. (down 1 percent).

Distressed sales, including bank-owned sales, in-foreclosure sales and short sales, accounted for 18.2 percent of all single family and condo sales in the first quarter, up from 17.2 percent in the previous quarter, the second consecutive quarter with an increase, but still down from 20.8 percent in first quarter 2015. The distressed sales share peaked nationwide at 44.0 percent in first quarter 2009.

Among 110 metro areas with at least 1,000 single family and condo sales in the first quarter, those with the highest share of distressed sales were Chicago (31.0 percent); Flint (29.9 percent); Baltimore (28.8 percent); Tallahassee, Fla. (28.1 percent); and Jacksonville, Fla. (27.6 percent).

RealtyTrac reported all-cash sales represented 31.8 percent of all U.S. single family and condo sales in the first quarter, down from 32.8 percent in the previous quarter and down from 35.4 percent a year ago the 12th consecutive quarter with an annual decrease. Buyers using loans backed by FHA--typically first-time buyers or boomerang buyers with a low down payment--accounted for 15.2 percent of all single family and condo sales in the first quarter, up from 14.8 percent in the previous quarter and up from 13.5 percent a year ago.

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