West Coast Sellers See Biggest Gains on Home Sales

– Home sellers in San Jose sold their homes for 54 percent more than they paid, for a median gain of $296,000

– Nationally, home sellers in 2017 made about $39,000 after owning their homes for eight and a half years. That’s a profit of about 21 percent.

– San Jose, where sellers are making the biggest profits, is seeing the fastest home value appreciation and the biggest declines in inventory.

– Most sellers are also trying to buy another home at the same time they are selling.

Seattle, WA – June 26, 2018 (PRNewswire) Through 2017, the West Coast saw some of the biggest home value increases over the past decade, and home sellers are seeing big profits as a result.

Nationally, home sellers last year made nearly $39,000, or 21 percent, when compared with what they originally paid for the home, according to a Zillow® analysis(i). The typical seller had lived in their home for 8.4 years before selling it.

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In San Jose, Calif., the typical home sold in 2017 earned the sellers 54 percent more than they originally paid for it nine years earlier, the highest profits of the metros analyzed. In the San Jose and San Francisco metros, sellers made more than the median value of a typical U.S. home.

A short supply of homes for sale has kept upward pressure on home prices, especially in markets where available homes are hardest to find. The profits are welcome news for home sellers who are able to cash in on higher home prices, but demonstrate how difficult the market is for buyers. It is increasingly common for homes to sell for more than the listed price – in 2017, nearly a quarter of all homes sold for more than the asking price, up from 18 percent in 2012(ii).

“In a housing market that’s been plagued by low inventory and increasing demand, homeowners in the nation’s hottest markets have been able to cash in when they sell their homes,” said Zillow Senior Economist Aaron Terrazas. “A home is typically the biggest investment someone makes, and it’s paid off for longtime owners in many markets across the country. Today’s typical seller bought in 2010 – just before the national housing market bottomed out in 2012. Of course, these sellers typically are buyers as well, but the profits from the sale of their former home give them an advantage over first-time buyers who may be coming in with smaller down payments.”

Nashville sellers sold their homes for a median of 34 percent more than they paid for it, the fifth highest percent gain among the markets Zillow analyzed. They made these profits faster than markets where home sellers saw larger returns – sellers in markets that saw bigger gains than Nashville sellers had owned their homes for at least a year longer before selling.

Most sellers – 71 percent – are simultaneously trying to buy their next home(iii). In 25 of the markets analyzed, the profits sellers made are not enough for a 20 percent down payment on the median home in that same area. Sellers only made enough to cover a down payment in places where they saw the biggest percent gains on the sale.

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Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) This analysis only looked at homes that were sold by individual sellers in 2017, and didn’t sell twice within a 60 day period. Only markets with at least 100 transactions were included.

(ii) https://www.zillow.com/research/home-sales-above-list-price-17875/

(iii) https://www.zillow.com/report/2017/sellers/typical-american-home-seller/

Cities Where The Majority of Americans Can’t Afford a Home

In many large cities, more than 50% of households cannot afford a home

Los Angeles, CA – Jan. 2, 2018 (PRNewswire) Six cities on the U.S. coasts have a 70 percent or higher percentage of households that can’t afford a home, a new study found.

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Personal finance website GOBankingRates used the median home listing price in the 100 largest cities to calculate typical monthly mortgage payments. Using the rule that no more than 30 percent of income should go toward housing, GOBankingRates calculated the income needed to afford a mortgage. Researchers then compared this income to the number of households with income equal to or greater than that amount.

For full study results and more details on methodology, visit: Places Where 50% of Americans Can’t Afford a Home

Top Five Cities With the Highest Percentage of Households That Can’t Afford a Home

1. San Francisco, CA

Median listing price: $1,199,000
Percentage of households that can’t afford a home: 76.7 percent

2. Boston, MA

Median listing price: $725,000
Percentage of households that can’t afford a home: 75.7 percent

3. Miami, FL

Median listing price: $450,000
Percentage of households that can’t afford a home: 74.3 percent

4. Long Beach, CA

Median listing price: $549,900
Percentage of households that can’t afford a home: 73.5 percent

5. Los Angeles, CA

Median listing price: $749,000
Percentage of households that can’t afford a home: 72.9 percent

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Additional Study Insights

  • Perhaps unsurprising due to its high real estate prices, six of the top 10 cities with the highest percentage of households that can’t afford homes are in California.
  • Some surprising cities made the final list. In New Orleans, the median home price is $300,000 but 65.4 percent of households can’t afford a home because wages are lower.
  • Median home prices in Oakland, Calif., are half as expensive as they are across the bay in San Francisco.

About GOBankingRates

GOBankingRates.com is a personal finance news and features website dedicated to helping visitors live a richer life. From tips on saving money, to investing for retirement or finding a good interest rate, GOBankingRates helps turn financial goals into milestones and money dreams into realities. Its content is regularly featured on top-tier media outlets, including MSN, MONEY, AOL Finance, CBS MoneyWatch, Business Insider and dozens of others. GOBankingRates specializes in connecting consumers with the financial institutions and products that best match their needs. Start your journey toward a rich mind and full wallet with us here.

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GOBankingRates.com
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These Are The States You Should Live In To Pay The Least Taxes

The average US household pays over $5,700 in federal income taxes. States like Alaska, Delaware and Nevada have tax rates nearly three times less than New York, Connecticut and Illinois. WalletHub calculated the average tax rate per state based on the median US household.