Sellers seeing record-high profit after longer tenure in homes

Sellers in the fourth quarter of 2018 saw an average home price gain of $61,000 since the original purchase of their home.

This is an $11,000 increase from 2017, and a $21,500 gain from 2016. It’s also a 32.6 percent return on investment from the purchase price, up from 27 percent in 2016 and 21.9 percent in 2016.

According to Attom Data Solutions, sellers in the fourth quarter had owned their properties for 8.3 year years, an increase from 8.13 years in the third quarter, and up about four months on year-to-year comparisons. This is the longest sellers had remained in their homes since the report began in the first quarter of 2000.

“While 2018 was the most profitable time to sell a home in more than 12 years, those along the coasts, reaped the most gains. However, those are the same areas where homeowners are staying put longer,” said Todd Teta, chief product officer at ATTOM Data Solutions. “The economy is still going strong and home loan rates remain historically low. But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place and mortgage rates are ticking up ever so slowly, so this could dampen the potential for home price gains in 2019.”

All-cash purchases remained stable this year across the country at 27.8 percent, the same as 2017, but below the 2011 peak of 38.4 percent.

Distressed home sales represented 12.4 percent of all home purchases. In Philadelphia, they represented 20.7 percent, the highest percentage for cities with populations of 1 million and above.