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according to atom data The average home seller is making a real profit of $112,000 in sales, up 21% from 2021 and up 78% from two years ago, according to the End of 2022 Home Sales Report.
The news comes despite the recent housing market recession that began in late 2022. In fact, 98% of the major housing markets saw him increase profits from 2021 to 2022.
This figure represents the highest level of home seller profits since 2008.
The average profit earned by each seller of $112,000 represents a 51.4% return on investment compared to the buyer’s original purchase price, a 44.6% increase from last year and a 32.8% increase in 2020.
“Home seller profits seem likely to have peaked in this cycle in 2022,” he said. Rick Sharga, EVP of Market Intelligence at ATTOM. “Since mortgage rates doubled from January to October, median prices have fallen every month, and are likely to fall further in many markets across the country in 2023, pushing home sellers’ earnings down. It may become less viable.”
Both gross margins and return on investment improved nationally for the 11th straight year, and will surge again in 2022, as the domestic median home price climbed 10% to $330,000.
Additionally, median home prices will rise 10% during 2022, reaching an all-time high of $330,000. Full-year median home price gains for 2022 fell below the 17.6% recorded in 2021.
Typical home sales profit margins have improved (90%) in 141 of the 157 metropolitan areas with sufficient data to analyze from 2021 to 2022. This came as his 10% rise in 2022 nationwide sales prices outpaced his 5% rise that recent sellers were paying when they first bought their homes.
In 2022, median home sales gross margin exceeded $100,000 in 79, or 50%, of the 157 metropolitan areas with sufficient data to analyze.
Another statistic monitored by ATTOM shows that sellers who sold homes in the fourth quarter of 2022 held their homes for an average of 5.85 years, up from 6.05 in the same period in 2021. The latest figures represent the third shortest average house. – Seller tenure since 2012. Average seller tenure decreased 72% year-over-year.
Nationwide, 36.1%, or one-third of single-family home and condo sales in 2022, were purchased all in cash, according to ATTOM. The latest percentages are the highest since 2013 and up from 34.4% and 22.7% in 2021. In 2020, it has yet to reach the 38.5% peak of 2011 and 2012.
“Cash buyers, who are not all investors, but many are investors, are well positioned to gain a competitive advantage in today’s high-interest-rate environment and will typically continue to do so, at least until mortgage rates come down. It will continue to occupy a higher market share than .It has dropped a little bit,” Shalga pointed out. “With affordability being an issue for many buyers, especially first-time buyers, it wouldn’t be surprising if the proportion of cash purchases actually increased in 2023.”
Foreclosure sales to lenders accounted for just 1.2%, or 1 in 87, of single-family home sales in 2022. This is at least his lowest since 2005. 3.6% in 2021 and 1 in 28 in 2020.
National institutional investors accounted for 6.5%, or one-fifteenth of single-family home and condo sales in 2022 in the United States. The latest figure was down from 8.1% in 2021, but more than double his 2020 level of 2.9%.
Buyers using Federal Housing Administration (FHA) loans will account for 7.5%, or 1 in 13, of single-family home and condo buyers nationwide in 2022, according to the final data in the report. This is down from his 8.3% in 2021. From 11.8% in 2020 to its lowest point since 2007.
click here View the entire report.
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