Home sale profits hit record high in equity rich Triangle – up 42% from 2021

RALEIGH – Profit margins on home sales for single family houses and condominiums in the Triangle and throughout the United States hit record highs in the second quarter of 2022 even as signs of a slowing economy have emerged, according to a new report from ATTOM Data Solutions.

How high? For homeowners in the Raleigh metropolitan statistical area who sold a home in the quarter, the typical gain upon sale was $167,750, which is up 42% from the year before.

The report comes as home prices continue to surge across the region.

According to the ATTOM data which was obtained by WRAL TechWire, a typical homeowner who sold a home in the Raleigh area in the second quarter of the year realized 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 saw net proceeds of $172,000 upon the sale of their property, a profit margin of 73.7%.

Both of those data points are record highs among the data set, which dates back to the first quarter of 2008. Across the entire data set, the average quarterly data on profit margin upon the sale of property in the Raleigh area is 15.2%, including the most recent quarter, and in the Durham area, is 15.6%.

Report: Homeowners in Charlotte, Wilmington, Triad making record profits on sales

Data from Triangle Multiple Listing Service (TMLS) shows that the median sale price of real estate in the Triangle, as well as in Wake County, Durham County, and Orange County, continues to increase, as displayed in the following chart. It shows the rolling average in the trailing three months of data in each monthly data point. And though Orange County saw a dip during the fall and winter months of 2021 and early 2022, the median sale price has since increased dramatically, surpassing the prior high observed in July 2021.

So, too, has the median sale price in each other data set increased, as well.

Homeowners are equity rich

So, what’s happening, here?

When home values increase, the owner of an individual home may gain equity in the house, which is the difference between what the home is worth on the open market less the money owned against the property. That typically comes in the form of a mortgage, but could also include a home equity line of credit or another outstanding lien on the property.

But home values have skyrocketed across North Carolina and in 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 roughly 25% of the total value of all real estate in Raleigh, estimated by Zillow at $201 billion, gained in one calendar year.

As housing market booms, more NC homeowners now ‘equity rich’

And that’s made a positive change in the individual balance sheets of those who own property in the region. For some, it’s made a huge difference.

A prior report from ATTOM showed that a record number of homeowners across North Carolina were considered to be “equity rich,” meaning their home was worth at least twice as much as the total balance on any outstanding loans owed. That report, issued in February 2022 that tracked data from 2021, found that, 49.4% of homeowners in Wake County with outstanding loans on their property were now considered equity rich.

Wake County median home sale price climbs to new high in June: $493,161

Real estate market remains hot

Since the beginning of the year, the real estate market has continued to stay hot, even with a recent pause in Wake County’s real estate market earlier this summer. Now, median sale prices are again at record highs, even though there are signs that the market may be shifting, just a bit, away from sellers.

And all of these gains in profit are coming even though homeowner tenure, or the amount of time that a homeowner lives or rents out the property before a sale occurs, is now at near record lows, according to ATTOM, with owners who sold property holding homes for a nationwide average of 5.87 years.

The only quarter where tenure was lower was the first quarter of the year, when it was 5.71 years and the second lowest since the first quarter of 2012. (Editor’s Note: ATTOM does not have data on North Carolina metropolitan regions in their data set.)

Of course, homeowners may have other options than selling their property to capture equity gains and to tap the value of their home, including new technology-enabled companies that have set up shop in the region.