Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 108 NUMBER 8 ■ MECKTIMES.COM
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TUESDAY, FEBRUARY 20, 2024
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Home-selling profits drop in 2023 for first time in over a decade amid modest price gains ATTOM, a leading curator of land, property and real estate data, today released its Year-End 2023 U.S. Home Sales Report, which shows that home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5 percent return on investment. But even as both gross profits and profit margins remained near record levels, they decreased from 2022, marking the first declines in either category since 2011. The gross profit on median-priced single-family homes sales dipped down from $122,600 in 2022 while the profit margin dropped, year over year, from 59.8 percent. That happened as the median nationwide home price rose at the smallest annual pace in more than a decade. The profit fallback came during a year of ups and downs for the U.S. housing market that featured flat prices early in 2023, followed by a spike in the Spring and a drop-off in the fourth quarter. Price patterns were mixed as the upward pressure of strong employment and investment markets, along with a historically tight supply of homes, competed with the downward force of home-mortgage rates that rose during most of 2023. “Last year certainly stood out as another very good year for home sellers across most of the United States. Typical profits of over $120,000 and margins close to 60 percent were still more than
double where they stood just five years earlier,” said Rob Barber, CEO at ATTOM. “But the market definitely softened amid modest price gains that weren’t enough to push profits up higher after a long run of improvements. In 2024, the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but home ownership costs that remain a serious financial burden for many households.” Among 129 metropolitan statistical areas with a population greater than 200,000 and sufficient sales data, sellers in western and southern states again reaped the highest returns on investment in 2023. The West and South regions had 12 of the 15 metro areas with the highest ROIs on typical home sales last year, led by San Jose, CA (99.4 percent return on investment); Knoxville, TN (98.1 percent); Seattle, WA (92.9 percent); Spokane, WA (90.6 percent) and Scranton, PA (89.6 percent).
National median home price rises at slowest pace since 2011
The U.S. median home price increased 2.1 percent from 2022 to 2023, reaching another all-time annual high of $335,000. The typical 2023 price has more than double the nationwide median in 2011, a point in time right before the housing market began recovering from the
aftereffects of the Great Recession that hit in the late 2000s. The 2023 increase, however, represented the smallest annual bump during the extended boom period that began in 2012. The full-year median homeprice appreciation slowed down as interest rates rose in 2023 close to 8 percent for a 30-year mortgage. While gains were mostly small, median prices still rose from 2022 to 2023 in 97, or 75 percent of the 129 metropolitan statistical areas around the U.S. with a population of 200,000 or more and sufficient home price data last year. Those with the biggest year-over-year increases were Hilton Head, SC (median up 12.2 percent); Naples, FL (up 10.6 percent); Hartford, CT (up 10.5 percent); Savannah, GA (up 10.5 percent) and Rochester, NY (up 9.7 percent). Aside from Hartford and Rochester, the largest median-price increases in metro areas with a population of at least 1 million in 2023 came in Miami, FL (up 8.6 percent); Cincinnati, OH (up 8.1 percent) and Milwaukee, WI (up 6.9 percent). Metro areas where median prices dropped most in 2023 were Austin, TX (down 6.2 percent); San Francisco, CA (down 4.4 percent); Stockton, CA (down 4.4 percent); Boise, ID (down 4.1 percent) and Phoenix, AZ (down 3.8 percent).
PLEASE SEE HOME-SELLING ON PAGE 6
“Although job gains were modest last month, other evidence suggests there is still lots of demand for workers. Wages rose faster than in other sectors, job openings at the end of 2023 were at near-record levels for December, and construction spending jumped that month.” Ken Simonson, AGC.
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