Sellers’ Profits Drop From Second Quarter to Third

By Kelly Leighton | Oct. 26, 2022 | 2 min. read

Sellers’ profits decreased in the third quarter of this year compared to the second quarter, the first drop in nearly three years.

According to ATTOM, sellers made a 54.6% profit on average in the last quarter, down from 57.6% in the second quarter, as home prices have begun falling from a record high in June, both across the country and in Pennsylvania. It was the largest quarterly drop in more than a decade and the first time since 2010 that seller profits decreased from the second to third quarters. Gross profits fell as well, decreasing 6% to $120,000, the largest quarterly drop in five years. While there was a quarterly drop, sellers are still making a higher profit compared to year-over-year statistics. For the third quarter of 2021, sellers made a profit of 48.8%.

In more than two-thirds (68%) of 186 metropolitan statistical areas in the report, profit margins fell from the second quarter. However, the majority (78%) of areas had a year over year increase in profit margins for sellers. Median home prices fell in 53% of areas from the second to third quarters, but prices were up in 97% year over year. Philadelphia was one of the few areas where home prices saw an uptick from the second to third quarter, rising 6.7%.

Cash sales remained high, representing 35.7% of sales, down 0.3% from the second quarter, but up from 33.9% annually.

The average seller lived in their home for just shy of six years (5.98) before moving, up from 5.84 years in the second quarter, but a decrease from 6.28 years last year. This was common across the areas studied, 81% had a decrease in length of homeownership.

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