The return on investment a homeowner gets when they sell depends not only on the market, but also largely on how long it has been since they bought. But based on sales last year, D.C. region homeowners who sold made out well, at least for raw profits.
“Nationally, somebody is making about $112,000 on a median home sale. In the D.C. metro area, it is about $155,000. But on average, nationally, people are making about a 21% return, whereas in the D.C. market it is less than a 10% return,” said Rick Sharga, executive vice president of market intelligence for Attom Data Solutions.
Considering how much home prices rose from 2020 through mid-2022, that may seem a low return on investment for percentage gain, but homeowners in the D.C. region who sold last year had owned their home a little less than six years.
“Prices may have risen faster in the D.C. market than in some other parts of the country, so we have people buying at or near the peak earlier in this cycle, and not benefiting as much from the eventual run-up in prices that you might have seen in some other markets,” Sharga said.
For buyers who bought in the D.C. area recently, particularly in the last year, selling for a meaningful profit is unlikely right now.
“Much like markets in California and Arizona, the D.C. area market tends to be a little more volatile with prices, so we are likely to see maybe some declines in D.C. in the short term, but probably a pretty rapid recovery,” Sharga said.
Among the 157 metropolitan areas Attom Data analyzed, those in western and southern states saw the highest returns on investment in 2022, with 14 of the 15 metro areas with the highest ROIs on a typical home sale.
Among all sellers in 2022, the average home tenure was 5.85 years, though that represents how long those who chose to sell in 2022 had owned their home, not an average for all homeowners.
Homeownership tenure among all owners has been increasing in the past decade, with owners choosing to stay put longer.