Profits from home sales hit record high in stock-rich Triangle – up 42% from 2021
RALEIGH- Profit margins on sales of single-family homes and condominiums in the Triangle and across the United States hit record highs in the second quarter of 2022 even as signs of a slowing economy emerged, according to a new report from ‘ATTOM Data Solutions.
How high ? For Raleigh Metropolitan Statistical Area homeowners who sold a home during the quarter, the typical gain on sale was $167,750, a 42% increase over the prior year.
The report comes as home prices continue to climb in the region.
According to ATTOM data obtained by WRAL TechWire, a typical homeowner who sold a Raleigh-area home in the second quarter of the year earned a profit margin of 64.3% on the sale of that property.
And returns were even higher elsewhere in the Triangle, as homeowners in the Durham-Chapel Hill Metropolitan Statistical Area typically received net proceeds of $172,000 when selling their property, a profit margin of 73.7 %.
Both of these data points are record highs among the dataset, which dates back to the first quarter of 2008. Across the dataset, the average quarterly profit margin data on the sale of a property in Raleigh Region is 15.2%, including the most recent quarter, and in Durham Region, is 15.6%.
Report: Owners of Charlotte, Wilmington, Triad make record profits on sales
Data from the Triangle Multiple Listing Service (TMLS) shows that the median sale price of real estate in the Triangle, as well as Wake County, County Durham and Orange County, continues to rise, as the shows the following graph. It shows the moving average of the last three months of data in each monthly data point. And while Orange County saw a decline through the fall and winter months of 2021 and early 2022, the median sale price has since risen significantly, surpassing the previous record high seen in July 2021.
Similarly, the median selling price in each of the other datasets also increased.
Owners are capital rich
So what’s going on here?
When the value of the house increases, the owner of a detached house can acquire equity in the house, which is the difference between the value of the house on the open market minus the cash held against the property. This usually comes in the form of a mortgage, but can also include a home equity line of credit or other outstanding lien on the property.
But home values have soared in North Carolina and the Triangle, with Raleigh-area homes adding an estimated $50 billion in value in 2021 alone, according to a Zillow report. Put another way, that’s about 25% of the total value of all real estate in Raleigh, estimated by Zillow at $201 billion, earned in a calendar year.
As housing market booms, more NC homeowners are now ‘stock rich’
And it has brought about a positive change in the individual balance sheets of those who own property in the region. For some, it made a huge difference.
An earlier report by ATTOM showed that a record number of homeowners across North Carolina were considered ‘equity rich’, meaning their home was worth at least twice as much as the total balance of all loans in progress due. That report, released in February 2022 and tracking 2021 data, found that 49.4% of Wake County homeowners with outstanding loans on their property were now considered equity rich.
Wake County median home sale price hits new high in June: $493,161
The real estate market remains hot
Year-to-date, the real estate market has continued to remain hot, even with a recent pause in the Wake County real estate market earlier this summer. Now, median selling prices are again at record highs, although there are signs that the market might pull back a bit from the sellers.
And all of these profit gains are happening even though landlord occupancy time, or how long a landlord lives or rents the property before a sale occurs, is now at an all-time high, according to ATTOM. owners who have sold property holding homes for a national average of 5.87 years.
The only quarter where seniority was lower was the first quarter of the year, when it was 5.71 and the second lowest since the first quarter of 2012. (Editor’s note: ATTOM does not have data for North Carolina metropolitan areas in its dataset.)
Of course, homeowners may have other options than selling their property to capture capital gains and leverage their home’s value, including new technology-focused businesses that have moved into the area.
Many Triangle owners are now “stock rich”; here’s how to cash out