Bay Area Home Price Gains & Losses In Q3 2020

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Bay Area Home Price Gains & Losses In Q3 2020

Categories: Homes Planning Real Estate

Published 10/27/2020

Photo by David Vives on Unsplash

Key Takeaways:

  • The largest decrease in profit margins in the Bay Area was in San Francisco, C.A. is down from 71.3% to 64.5%.
  • The most profit margins in the country with 14 of the top 15 typical home-sale returns on investment in the third quarter led by San Jose, C.A. at an 89% return.
  • The top metro areas with a population of at least 1 million, where distressed sales made up the smallest portion of all sales in the third quarter were San Jose at 2.6%, and San Francisco, CA at 3%.
  • A staggering 67.4% of listings in the combined statistical area of San Francisco-San Jose faced bidding wars.

Overview:

ATTOM Data Solutions, the curator of the nation’s premier property database, and the first property data provider of Data-as-a-Service (DaaS). Released a report that reveals that the typical third-quarter 2020 home sale in the United States generated a gain of $85,000, up from $75,000 in the second quarter of 2020, and $66,000 in the third quarter of last year. The typical $85,000 home-sale profit represented a 38.6% return on investment compared to the original purchase price, up from 37.5% in the second quarter of 2020 and up from 33.7% a year ago.

Both the raw-profit and return-on-investment figures stood at the highest points since the U.S. economy began recovering from the Great Recession in 2012, and represents a continued increase even as the Coronavirus pandemic has damaged the economy and led to spikes in unemployment throughout the country this year.

Profit margins climb in nearly nine of every 10-major metro area:

Typical profit margins – the percent change between median purchase and resale prices – rose from the third quarter of 2019 to the third quarter of 2020 in 89 of 103 metropolitan statistical areas around the United States with sufficient data to analyze. Included metro areas have at least 1,000 single-family home and condo sales in the third quarter of 2020.

Profit margins dropped in just 14 of the 103 metro areas analyzed. The largest decrease was in San Francisco, C.A. is down from 71.3% to 64.5%. Despite the loss in SF, profit margins remain highest in western markets. The most profit margins in the country with 14 of the top 15 typical home-sale returns on investment in the third quarter led by San Jose, C.A. at an 89% return.

U.S. distressed sales at a 15-year low:

Distressed home sales — including bank-owned (REO) sales, third-party foreclosure auction sales, and short sales — accounted for 7.2% of all U.S. single-family home and condo sales in the third quarter of 2020, down from 8.1% in the prior quarter and down from 9.8% in the third quarter of 2019. The latest figure marks the lowest point since the third quarter of 2005 and is less than one-sixth of the peak level of 45.2% in the first quarter of 2009.

The top metro areas with a population of at least 1 million, where distressed sales made up the smallest portion of all sales in the third quarter were San Jose at 2.6%, and San Francisco, CA at 3%

Bidding wars boom as homes spend little time on the market:

About 56.3% of U.S. properties underwent bidding wars in September, down from a revised rate of 59.1% in August. But the competitive share once again quintupled the year-ago rates: in September 2019, only 11% of home sales underwent bidding wars. A staggering 67.4% of listings in the combined statistical area of San Francisco-San Jose faced bidding wars. Although, there was no difference in days listed on the market between the top and bottom price tiers in San Francisco — where the bottom 20% of homes sold 2-days faster than the top 20% of properties.

If you have questions about how your property stands against similar homes in your area, contact Darryl Glass today. For assistance with all home buying and selling needs, please call (510) 500-7531 or email dglass@adventpropertiesinc.com

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