Home Prices, Seller Profits Down In Puget Sound: Report

WASHINGTON — People hoping to sell their Washington home soon may see a drop in profit thanks to rapidly-rising mortgage rates and a decrease in home values over the past three months, according to a new report.

ATTOM, a curator of nationwide real estate data, released its third-quarter 2022 U.S. Home Sales Report last week. The report shows that seller profits on median-priced single-family homes and condos across the United States dropped 3 percent from the second to the third quarter of 2022 in more than half of the 186 metropolitan areas tracked.

In all, profit margins — or the percentage change between median purchase and resale prices — dropped from 57.6 percent to 54.6 percent, according to ATTOM. Fortunately, seller profits are still higher than they were a year ago when margins came in at 48.8 percent.

The change also comes as the median national home value dropped 3 percent in the third quarter to roughly $340,000. Despite the drop, home prices are still higher than they were a year ago in nearly 97 percent of cities tracked.

“Rapidly-rising mortgage rates have not only resulted in fewer home sales but have begun to impact home prices as well,” Rick Sharga, executive vice president of market intelligence at ATTOM, said in a release. “With rates the highest they’ve been in over 20 years, homebuyers face serious affordability challenges, with monthly payments in some markets up 50 percent year-over-year. It’s very likely that home prices will continue to weaken in many markets in the coming months.”

For the greater Seattle region, which includes Bellevue and Tacoma, median home prices slipped more than 7 percent last quarter, dropping from $730,000 to $677,225. Prices are still up nearly 6 percent since the same time last year, 25 percent over two years, and a whopping 60 percent higher than five years ago, ATTOM found.

As Bloomberg and The Seattle Times reported Tuesday, the S&P CoreLogic Case-Shiller price index found year-over-year prices up almost 10 percent for single-family homes around King, Pierce and Snohomish counties. However, Seattle saw the nation's second-largest dip in prices between July and August.

Last month, Redfin said the Emerald City's housing market was cooling faster than any other major city in the U.S.

Average mortgage rates have doubled this year, passing 6 percent for a 30-year fixed-rate loan, according to ATTOM. Meanwhile, the stock market has slumped and consumer price inflation is at a 40-year high. Foreclosure activity by lenders also more than doubled over the past year, the report says.

Combined, those factors have raised home-ownership costs for buyers, cut into resources available for down payments on purchases and eaten into overall household budgets. They also increased the supply of homes for sale, causing prices to drop.

“If the Federal Reserve’s objective was to slow down the housing market, it has succeeded spectacularly,” Sharga said.

The biggest quarterly decreases in profit margins were reported in the following metro areas, according to the report:

• Claremont-Lebanon, New Hampshire (down from 72.8 percent in Q2 of 2022 to 52.4 percent in Q3)
• San Francisco, California (down from 85.1 percent to 65.4 percent)
• Prescott, Arizona (down from 86.3 percent to 70.8 percent)
• Barnstable, Massachusetts (down from 74.5 percent to 59.6 percent)
• Trenton, New Jersey (down from 74.5 percent to 61 percent)

Typical profit margins increased in just 59 metro areas. The biggest quarterly increases were:

• Macon, Georgia (up from 44.7 percent in Q2 of 2022 to 82.4 percent in Q3)
• Rockford, Illinois (up from 29.9 percent to 41.8 percent)
• Davenport, Iowa (up from 29.2 percent to 40 percent)
• Akron, Ohio (up from 52.8 percent to 60.3 percent)
• Hilo, Hawaii (up from 103.3 percent to 110.9 percent)

The biggest decreases in median home prices were recorded in the following areas:

• San Francisco, California (down 13 percent)
• Charleston, North Carolina (down 12.8 percent)
• Crestview-Fort Walton Beach, Florida (down 11.3 percent)
• San Jose, California (down 8.3 percent)
• Naples, Florida (down 8.2 percent)

The largest increases in median prices from the second to the third quarter were in these cities:

• Trenton, New Jersey (up 14.6 percent)
• Albany, New York (up 8.7 percent)
• New York, New York (up 7.5 percent)
• Wichita, Kansas (up 7.1 percent)
• Philadelphia, PA (up 6.7 percent)

View ATTOM’s full report.