Average Price Gain of $40,658 Highest Since Q3 2007 Despite Annual Home Price Appreciation Slowing to 2 Percent in Third Quarter, Slowest During Recovery;
FHA Buyer Share Increases While Share of Cash and Distressed Sales Continues to Drop
IRVINE, Calif. – Nov. 5, 2015 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its September and Q3 2015 U.S. Home Sales Report, which shows that homeowners who sold during the third quarter realized an average price gain of $40,658 (17 percent) from the purchase price of their property, the highest average price gain for home sellers since the third quarter of 2007. The report also shows home sellers in the third quarter on average had owned their home for 6.72 years when they sold.
The eight-year high in average price gains for home sellers in the third quarter came despite slowing home price appreciation. The average sale price of single family homes and condos nationwide during the quarter was $263,976, up 0.2 percent from the previous quarter and up 2.4 percent from the third quarter of 2014 — the slowest year-over-year price appreciation in any quarter since home prices bottomed out in the first quarter of 2012.
The report also shows 2,487,664 existing single family and condo sales through the first three quarters of 2015, the highest level for the first nine months of a year since 2006 — a nine-year high.
“An increasing number of homeowners in 2015 have been cashing out the home equity they’ve gained during the housing recovery of the past three years,” said Daren Blomquist, vice president at RealtyTrac. “That may be a good decision because the data points to a plateauing market going forward. Home price appreciation is slowing, a trend that will continue if interest rates rise in the coming months as expected. Meanwhile the threat of rising interest rates combined with lowered premiums for buyers using FHA loans is spurring more demand.”
Buyers using Federal Housing Administration (FHA) loans — typically low down payment loans utilized by first time homebuyers and other buyers without equity to bring to the closing table — accounted for 23.4 percent of all single family home and condo sales with financing — excluding all-cash sales — in the third quarter of 2015, up from 23.2 percent in the second quarter and up from 17.9 percent in the third quarter of 2014 to the highest share since the second quarter of 2012.
Major metro areas with the highest share of FHA loans in the third quarter included Bakersfield, California (41.3 percent), Modesto, California (40.4 percent), McAllen, Texas (39.7 percent), Las Vegas, Nevada (37.1 percent), Riverside, California (37 percent), and Dayton, Ohio (29 percent).
“Home sales in the third quarter saw an increase in first-time home buyers in the area. With FHA loans accounting for nearly a third of the overall purchase transactions across the state, low interest rates, and the tax benefits of homeownership continue to be driving factors for home buyers to elect to purchase, versus renting,” said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio. “Seeing greater homeownership in communities, as compared to vacancies a few years ago, is providing notable increases in equity for all homeowners to enjoy.”
Counties with biggest home seller gains and losses in third quarter
RealtyTrac analyzed 171 counties with at least 500 sales in the third quarter and where home price data was available both on the most recent purchase and the previous purchase. In 20 of those counties (12 percent) home sellers on average in the third quarter sold for a lower price than what they purchased for.
Counties where sellers on average sold for the biggest percentage loss were Pasco County, Florida in the Tampa metro area (11.1 percent loss), Hamilton County, Ohio in the Cincinnati metro area (9.4 percent loss), McHenry County, Illinois (9.0 percent loss), Hernando County, Florida in the Tampa metro area (8.5 percent loss), and Mobile County, Alabama in the Mobile metro area (6.8 percent loss). Among these five counties, homeowners who sold in the third quarter had owned for an average of 6.93 years when they sold.
“The millennials and first-time homebuyers are kicking in and taking advantage of low interest rates and loosening financing options,” said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market where average home seller price gains in the third quarter ranged from 11.7 percent in Palm Beach County to 14.9 percent in Miami-Dade County. “Our market has returned to a balanced normal market with real sellers and real buyers.”
Counties where sellers on average sold for the biggest percentage gain in the third quarter were San Francisco County, California (58.7 percent gain), San Mateo County, California also in the San Francisco metro area (55.7 percent gain), Santa Clara County, California in the San Jose metro area (47.7 percent gain), Alameda County, California in the San Francisco metro area (43.1 percent gain), and New York County, New York (41.6 percent gain). Among these five counties, homeowners who sold in the third quarter had owned for an average of 7.04 years when they sold.
“Our market continues to be strong, in fact we saw increased year-over-year sales numbers for our offices, but we have begun to see the annual slowdown in the market that happens after August that is giving buyers an opportunity to purchase under less stressful circumstances of multiple offers and quick deadlines,” said Greg Smith, owner/broker at RE/MAX Alliance, covering the Denver market in Colorado. Denver County had the sixth highest average home seller percentage price gain in the third quarter at 41.5 percent. “We have seen a strong influx of parents buying ‘kiddie condos’ for their children to live in while attending college. Parents seem to be choosing this path as both an investment, but also to ensure their child lives in a well-kept property that meets their expectations.”
41 percent of markets post annual home price decrease
RealtyTrac analyzed 135 counties nationwide with at least 1,000 sales with home price data available in the third quarter and found that 55 of those counties (41 percent) posted a year-over-year decrease in average home prices in the third quarter.
Counties with the biggest year-over-year decrease in home prices were Guilford County, North Carolina in the Greensboro metro area (down 9.9 percent), Fulton County, Georgia in the Atlanta metro area (down 9.3 percent), Tulsa County, Oklahoma in the Tulsa metro area (down 9.2 percent), Baltimore County, Maryland in the Baltimore metro area (down 9.1 percent), and Du Page County, Illinois in the Chicago metro area (down 8.9 percent).
Counties with the biggest year-over-year increase in home prices were San Mateo County, California in the San Francisco metro area (up 17.6 percent); New York County, New York (up 16.1 percent); Santa Clara County, California in the San Jose metro area (up 15.7 percent); Weld County, Colorado in the Greeley metro area (up 14.6 percent); and San Francisco County, California (up 13.3 percent).
Share of cash sales at lowest level since the third quarter of 2008
There were 245,220 all-cash sales of single family homes and condos in the third quarter, 27.8 percent of all single family home and condo sales during the quarter. Down from 28.7 percent of all sales in the previous quarter and down from 29.0 percent of all sales a year ago.
Metros with highest share of cash sales in the third quarter were Fort Smith, Arkansas (62.6 percent), Rocky Mount, North Carolina (59.6 percent), Sebastian-Vero Beach, Florida (55.5 percent), Punta Gorda, Florida (52.3 percent), Montgomery, Alabama (52.1 percent), and Miami, Florida (51.5 percent).
Major metros with an increasing share of cash sales included Raleigh, North Carolina (up 36 percent), St. Louis, Missouri (up 32 percent), New York, New York (up 30 percent), Philadelphia (up 26 percent), and San Jose (up 11 percent).
Institutional investor share down from a year ago
In the third quarter, there were 15,956 sales of single family homes and condos to institutional investors, 1.9 percent of all sales. That was up from 1.6 percent in the previous quarter but down from 5.0 percent a year ago.
Eighty metros posted a higher share of institutional investor sales than the national average, led by Montgomery, Alabama (9.8 percent), Columbus, Georgia (7.1 percent), Muskegon, Michigan (6.0 percent), El Paso, Texas (5.5 percent), and Jacksonville, Florida (5.5 percent).
Other major metros with a high percentage of institutional investor sales included Cincinnati, Ohio (4.9 percent), Memphis, Tennessee (4.8 percent), Orlando, Florida (3.8 percent), Cleveland, Ohio (3.8 percent), and Columbus, Ohio (3.8 percent).
Share of homes sold while in the foreclosure process drops to 15-year low
There were 72,218 single family homes and condos sold in the third quarter while actively in the foreclosure process, 8.1 percent of all sales. That was down from 8.2 percent in the previous quarter and down from 9.2 percent a year ago to the lowest level going back as far as RealtyTrac has national data, January 2000.
Metros with highest share of in-foreclosure sales in the third quarter were Jacksonville, North Carolina (19.4 percent), Columbus, Georgia (17.4 percent), Wilmington, North Carolina (17.4 percent), Worcester, Massachusetts (16.9 percent), and Norwich, Connecticut (16.1 percent).
Other major metros with a high percentage of in-foreclosure sales in the third quarter were Las Vegas, Nevada (15.3 percent), Chicago, Illinois (15.2 percent), Tampa, Florida (13.5 percent), Cincinnati, Ohio (12.8 percent), and Hartford, Connecticut (12.7 percent).
Bank-owned sales share falls for the third consecutive quarter
In the third quarter, 72,245 bank-owned (REO) single family homes and condos sold, also 8.1 percent of all sales. That was down from 9.2 percent in the previous quarter and down from 10.8 percent a year ago to the lowest level since the third quarter of 2007 when it was at 8.0 percent. The recent peak in REO sales was 34.3 percent of all sales in the first quarter of 2009 (highest going back as far as RealtyTrac has national data, January 2000).
Metros with the highest share of REO sales in the second quarter were East Stroudsburg, Pennsylvania (31.3 percent), Hagerstown-Martinsburg, Maryland (21.4 percent), Lakeland, Florida (20.6 percent), Muskegon, Michigan (19.7 percent), and Orlando, Florida (19.7 percent).
Other major metros with a high percentage of bank-owned sales in the third quarter included Jacksonville, Florida (18.6 percent), Tampa, Florida (17.3 percent), Miami, Florida (16.7 percent), Baltimore, Maryland (16.7 percent), and Birmingham, Alabama (13.5 percent).
Major metros with the biggest decline in the share of REO sales included Phoenix, Arizona (down 45 percent), Sacramento, California (down 44 percent), Nashville, Tennessee (down 43 percent), Raleigh, North Carolina (down 43 percent), and Seattle, Washington (down 40 percent).
“The decline in distressed sales is a double-edged sword,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “On one hand, it’s a positive indication that the market is returning to normal; however, we are in dire need of inventory, and distressed listings were helping with the supply issues that are pervasive in the Seattle market.”
The RealtyTrac U.S. Home Sales Report provides percentages of distressed sales and all sales that are sold to investors, institutional investors and cash buyers, a state and metropolitan statistical area. Data is also available at the county and zip code level upon request. The data is derived from recorded sales deeds, foreclosure filings and loan data. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available for those previous months.
All-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.
Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in a calendar year.
REO sale: a sale of a property that occurs while the property is actively bank owned (REO).
In-foreclosure sale: a sale of a property that occurs while the property is actively in default (NOD, LIS) or scheduled for foreclosure auction (NTS, NFS).
RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary Homefacts.com, the company’s proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac’s data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers.
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