Residential News »irvine edition | by david barley | november 4, 2021 8:06 am et The median home price in North America is at an all-time high
U.S. real estate market
According to Atom Data's latest quarterly U.S. home sales report, the profit margin on mid-priced single-family home and condominium sales jumped to 47.6 percent, the highest level since the end of the Great Recession a decade ago.
The report shows that in the third quarter of 2021, typical home sales in the United States generated a profit of $100178 as the national median home price reached a record $310,500, which is another sign that the U.S. housing market is still strong. The latest profit level — and an all-time high — was higher than $88,800 in the second quarter of 2021 and $69,000 in the third quarter of 2020.
Those gains boosted sellers' return on investment nationwide, from 34.5 percent in the year-ago quarter to 42 percent in the second quarter of this year. The increase in return on investment was the largest quarterly increase since 2014 and the largest annual increase since at least 2008.
In the third quarter, the national average house price increased by 3.5% from the second quarter of 2021 and 15.9% from the third quarter of 2020. This annual price increase marks the fifth consecutive quarter of year-on-year increases of at least 10%.
The U.S. housing market exploded in the third quarter, with median home prices in the U.S. metropolitan area with enough data analysis rising year-on-year, while profit margins rose 86 percent.
The latest price and profit improvements reflect the rapid growth of the housing market, even though the U.S. economy is only gradually recovering from the widespread damage caused by the pandemic at the beginning of last year and continues to pose a threat. With interest rates hitting rock bottom and fears of living in densely populated, virus-susceptible areas, a large number of homebuyers have been chasing tightly supplied homes for sale for the past year and a half, pushing up demand and prices.
"The third quarter of this year marks another period of boom in the housing market, and this is its 10th year. Prices and seller profits once again hit new highs since the market began to recover from the Great Recession in 2012. "As we move into the usually calm autumn-winter season, there have been some small signs of a possible slowdown in recent months."
Profit margins in nearly 90 percent of U.S. cities are growing every year
From the third quarter of 2020 to the third quarter of 2021, the profit margin (percentage change between the intermediate purchase price and the resale price) of typical homes in 175 (86%) of the 204 largest cities in the United States increased. Of the 204 largest cities, 168 (82 percent) also increased profits from the second quarter of this year. If the sales of single-family homes and condominiums in the third quarter of 2021 are not less than 1,000 units and the population is not less than 200,000, metropolitan areas are also included.
The largest annual increase in profit margins was in the boise city (id) metropolitan area (margin rose from 61.4% in the third quarter of 2020 to 130.3% in the third quarter of 2021); Claremont-Lebanon, New Hampshire (up from 41.1 percent to 93.8 percent); Augusta, Georgia (from 19.6% to 56.6%); Raleigh, North Carolina (from 30.4 percent to 67 percent) and Bellingham, Washington (from 69.5 percent to 105.6 percent).
Aside from Raleigh, the largest increase in profit margins in metropolitan areas with a population of more than 1 million in the third quarter of 2021 was Detroit, Michigan (profit margins rose from 43 percent to 68 percent); Rochester, NY (up from 39.4 percent to 63.8 percent); Austin, Texas (from 47.6 percent to 70.9 percent) and Pittsburgh, Pennsylvania (from 40.1 percent to 61.9 percent).
Of the 204 analysis areas, only 29 (14%) had unchanged or decreased margins year-on-year, compared with 36 (18%) quarterly margins. The largest annual decline was in Salem, Oregon (margins fell from 75.6% in the third quarter of 2020 to 48.3% in the third quarter of 2021); Brownsville, Texas (down from 37.1 percent to 13 percent); Kansas City, Missouri (from 43.6 percent to 25.1 percent); San Jose, California (down from 86.2 percent to 71 percent) and McAllen, Texas (down from 33.4 percent to 19.9 percent).
Excluding Kansas City and San Jose, the largest annual decline in profit margins in metropolitan areas with more than 1 million people was Los Angeles, California (from 54.3 percent to 44.5 percent); Cleveland, Ohio (from 32.8 percent to 25.7 percent) and Las Vegas, Nevada (from 43.8 percent to 37.2 percent).
The West is once again the most profitable market; The smallest is in the south
Nationally, the typical residential sales margins in the west remain the highest, with eight of the top ten cities with the highest return on investment in the third quarter of 2021 coming from the west. In first place is the City of Boise (130.3%); Bellingham, Washington (105.6%); Claremont-Lebanon, New Hampshire (93.8%); Spokane, Washington (87.7 percent) and Prescott, Arizona (84.7 percent).
Of the 15 cities with the smallest profit margin growth, 11 are in the southern region of the country. The lowest was Shreveport in Los Angeles (2%); gulfport, ms (7.4%); Columbus, Georgia (9.9%); Atlantic City, New Jersey (12.4 percent) and Brownsville, Texas (13 percent).
Two-thirds of the country's regional profit margins rose by at least 10 percent.
In the third quarter of 2021 (July-September), 136 of the 204 regions (67%) had a median home margin of more than 10%. Nationally, the median home price in the third quarter was $310,500, up from $300,000 in the second quarter of 2021 and $268,000 in the third quarter of last year.
The largest year-over-year increase in median home prices in the third quarter of 2021 was in Worcester, Massachusetts (up 42.9%); barnstable, ma (up 32.5%); Boston, Massachusetts (up 28.4%); Boise, Illinois (up 28.3 percent) and Lakeland, Florida (up 27.8 percent).
Excluding Boston, the largest increase in the metropolitan area with a population of at least 1 million in the third quarter of 2021 was Austin, Texas (26 percent increase); Phoenix, AstraZeneca (up 25.5%); Las Vegas (up 22.8 percent) and Tucson, Arizona (up 22.4 percent).
In the report, in the third quarter of 2021, 84% of housing prices in metropolitan areas, including New York, reached or were at the same level as historical highs; Including Los Angeles CA; Chicago, il; Dallas and Houston, Texas.
The largest year-over-year decline in median home prices in the third quarter of 2021 was in Brownsville, Texas (down 11.9%); Pittsburgh, Pennsylvania (down 10.1%); Gulfport, Microsoft (down 8.8%); Santa Maria, California (down 7 percent) and Charleston, South Carolina (down 4.9 percent).
The homeownership rate remains at its lowest level in 8 years
Homeowners who sold homes in the third quarter of 2021 had an average home ownership period of 6.31 years, essentially unchanged from 6.29 years in the second quarter of 2021 and a decrease of more than 1 year compared to 7.85 years in the third quarter of 2020. The last two quarters were the shortest buying and resale times since the first quarter of 2013.
Of the 109 cities with adequate data analysis, homeownership rates in 101 (93 percent) were down from the third quarter of this year. At the top of the list was Lakeland, Florida (down 74%); Tucson, Arizona (down 53%); Madeira, California (down 44%); Springfield, Massachusetts (down 43 percent) and Memphis, Tennessee (down 43 percent).
Of the 20 regions with the longest average ownership period in the third quarter of 2021 (July to September), 15 were located in the northeast or west. Number one was Manchester, New Hampshire (10.09 years); Bellingham, Washington (9.91); Lake Havasu, Az (9.69 years old); Kahului-wailuku-lahaina hi (9.21) and rockford il (8.81).
The smallest average homeowner in the third quarter was Lakeland, Florida (1.97 years); Bremerton, Washington (2.79); Portland, Maine (3.39 years old); Gulfport, MS (4.05) and TUCSON, AZ (4.06).
Cash sales reached their highest level in 6 years
Nationally, all-cash purchases accounted for 34 percent of all single-family home and condo sales in the third quarter of 2021, the highest level since the first quarter of 2015. The numbers for the third quarter of this year increased compared to the second quarter of 2021 (33.2%) and the third quarter of last year (21.4%).
Among the large urban statistical regions with more than 200,000 people and sufficient cash sales data, the region with the largest share of cash sales in total transactions in the third quarter of 2021 was Columbus, Georgia (74.6%); Atlanta, GA (69%); Macon, Georgia (59.3%); Youngstown, Ohio (56.6 percent) and Detroit, Michigan (56.2 percent).
Companies with the smallest share of cash sales in all transactions in the third quarter of 2021 included Lincoln (15.7%); Greeley, co (17%); Salem, Oregon (17.1 percent), Washington (17.2 percent) and Worcester, Massachusetts (18.7 percent).
Institutional investment hit a 7-year high
In the third quarter of 2021, the share of single-family homes and condominiums purchased by institutional investors nationwide was 7.3%, the highest level since the first quarter of 2014. That's a three-fold increase from 5% in the second quarter of 2021 and 2.4% in the third quarter of last year.
Of the states with enough data to analyze, the largest share of institutional investor sales in the third quarter of 2021 was in Arizona (17.4 percent), Georgia (13.9 percent), Mississippi (12.8 percent), Nevada (12.7 percent) and North Carolina (11.3 percent).
In the third quarter of 2021, the states with the lowest levels of institutional investor sales were Hawaii (1.7 percent of all sales), Maine (1.8 percent), Vermont (2.2 percent), New Hampshire (2.5 percent) and Rhode Island (2.5 percent).
Purchases from FHA financing remain at a nearly 14-year low
Nationally, buyers using Federal Housing Administration (FHA) loans accounted for just 8.3 percent of all single-family home and condo purchases in the third quarter of 2021, the second lowest level since the fourth quarter of 2007. The latest figures are up slightly from 8.1 percent in the previous quarter, but down from 11.8 percent in the same period last year.
Among metropolitan statistical regions with a population of at least 200,000 and sufficient FHA buyer data, the region with the highest number of FHA buyers in the third quarter of 2021 was Lakeland, Florida (21% of total sales); mobile, al (18.3%); Visalia (17.7%); Bakersfield, California (17.3 percent) and Yuma, Arizona (16.9 percent).
Home auctions account for only 1% of all sales
In the third quarter of 2021, home sales after foreclosure by banks and other lenders accounted for only 1.1% of all sales. That's down from 1.3 percent in the second quarter of 2021 and 2.9 percent in the third quarter of last year.
In the third quarter of 2021, the metropolitan area with a population of more than 200,000 and sufficient data to analyze the so-called reo sales accounted for the largest proportion of all sales was Macon, Georgia (4.6% of all sales); Lansing, Michigan (3.1%); St. Louis, Missouri (2.4 percent); South Bend (2.3%) and Baltimore, Maryland (2.3%).
ps: yourszworld comprehensive collation, reprint please indicate the source and id.