RealtyTrac released its March and Q1 2016 U.S. Home Sales report, which shows that U.S. home sellers in March on average sold for $30,500 more than they purchases for, a 17 percent average gain in price — the highest average price gain for home sellers in any month since December 2007 at the onset of the Great Recession.
The RealtyTrac Home Sales report is based on publicly recorded sales deeds collected and licensed by RealtyTrac in more than 900 counties nationwide accounting for more than 80 percent of the U.S. population.
Among 125 metropolitan statistical areas with at least 300 sales in March, home sellers realized the biggest average gains compared to purchase price in San Francisco (72 percent average gain); San Jose, California (60 percent); Boulder, Colorado (53 percent); Prescott, Arizona (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 Daren Blomquist, senior vice president at RealtyTrac. “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.
“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 added.
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, California (37 percent); San Diego (36 percent); and Sacramento (35 percent).
“Over the past year Seattle-area home prices have risen 11 percent to $360,000,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “While we’re not quite to our 2007 peak, this does officially push us into the top 10 highest median home prices in the country — a list traditionally dominated by Californian markets. Despite the pace at which home prices have been rising in Seattle, I’m not concerned about a bubble. Mortgage rates remain very favorable, and our region’s high performing economy continues to boost the local housing market.”
Sellers sold for less than purchase price in 15 percent of markets
There were still 19 markets (15 percent) where home sellers in March on average sold for less than what they purchased for, led by Rockford, Illinois (11 percent average loss compared to purchase price); Winston-Salem, North Carolina (10 percent average loss); Cleveland, Ohio (8 percent average loss); Columbia, South Carolina (7 percent average loss); and Wilmington, North Carolina (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, Alabama (2 percent average loss); and Flint, Michigan (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.
36 percent of markets reached all-time price peaks in last 15 months
The median sales price of single family homes and condos in March was $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 have reached new all-time home price peaks since January 2015, including seven markets that reached new price peaks in March 2016: Boulder, Colorado; Denver; Portland; Fort Collins, Colorado; Austin, Texas; Greeley, Colorado; and Cincinnati, Ohio.
“With low available listing inventories, coupled with investors continuing to realize higher rental returns, many are anticipating continued sales price increases through the remainder of the year,” said Michael Mahon, president atHER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio. “Due to this high demand, many home buyers are finding themselves in multiple-offer situations, and often times paying higher than list price.”
17 percent of markets posted year-over-year decline in home prices
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, Maryland (down 6 percent); Pittsburgh (down 4 percent following 21 consecutive months of increases); Virginia Beach (down 2 percent); Birmingham, Alabama (down 5 percent); and Tulsa, Oklahoma (down 1 percent).
Markets with the biggest annual increase in median home price were Philadelphia (up 29 percent); Rockford, Illinois (up 22 percent); Jacksonville, Florida (up 22 percent); Cincinnati, Ohio (up 19 percent); and Deltona-Daytona Beach-Ormond Beach, Florida (up 18 percent).
Distressed sales up quarterly for second consecutive quarter, still down from year ago
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 the first quarter of 2015. The distressed sales share peaked nationwide at 44.0 percent in the first quarter of 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, Illinois (31.0 percent); Flint, Michigan (29.9 percent); Baltimore, Maryland (28.8 percent); Tallahassee, Florida (28.1 percent); and Jacksonville, Florida (27.6 percent).
Metros with the biggest year-over-year increase in share of distressed sales were Little Rock, Arkansas (up 45 percent); Buffalo, New York (up 30 percent); Pittsburgh, Pennsylvania (up 16 percent), Milwaukee, Wisconsin (up 14 percent); and Greeley, Colorado (up 12 percent).
Among the nation’s 20 largest metro areas, three reported a year-over-year increase in the share of distressed sales: New York (up 3 percent); Washington, D.C. (up 4 percent); and Boston (up 5 percent).
Bank-owned price discount increases in March
The median sales price of a bank-owned (REO) home nationwide in March was $125,000, 40 percent below the median sales price of all homes — up from a 39 percent discount in both the previous month and a year ago.
Markets with the biggest bank-owned price discount were Canton, Ohio (83 percent), Dayton, Ohio (68 percent), Little Rock, Arkansas (66 percent), Birmingham, Alabama (64 percent), and Akron, Ohio (63 percent).
Other markets with a bank-owned price discount of more than 50 percent in March included Pittsburgh, Pennsylvania (61 percent discount), Cleveland, Ohio (57 percent discount), Columbus, Ohio (57 percent), Baltimore, Maryland (53 percent), and New York (53 percent).
Bank-owned homes nationwide in March sold for a median price of $81 per square foot, 34 percent below the median $123 per square foot for all homes. That was up from a price-per-square foot REO discount of 33 percent in both the previous month and a year ago.
All-cash buyer share decreases annually for 12th consecutive quarter
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.
Among 110 metro areas with at least 1,000 single family and condo sales in the first quarter, those with the top five highest share of all-cash buyers were all in Florida: Naples, (57.1 percent); Miami (53.9 percent); North Port-Sarasota-Bradenton (53.4 percent); Palm Bay-Melbourne-Titusville (52.7 percent); and Ocala (51.6 percent).
Metro areas outside of Florida with an above-average share of cash sales in the first quarter included Flint, Michigan (48.4 percent); Knoxville, Tennessee (46.2 percent); Detroit (45.2 percent); Birmingham, Alabama (45.2 percent); Memphis (44.7 percent); Raleigh, North Carolina (41.6 percent); Tulsa, Oklahoma (40.6 percent); and New York (39.6 percent).
FHA buyer share increases annually for seventh consecutive quarter
Buyers using loans backed by the Federal Housing Administration (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.
Among 110 metro areas with at least 1,000 single family and condo sales in the first quarter, those with the highest share of FHA buyers were Provo, Utah (13.8 percent); Ogden, Utah (12.4 percent); Salt Lake City (12.3 percent); Greeley, Colorado (11.9 percent); and Boise, Idaho (11.9 percent).
About The Author
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at firstname.lastname@example.org.