By Amber Bonefont
FORT LAUDERDALE, Fla. – Home sellers in South Florida made record profits last year, even with the housing market slowing down in the latter half.
In South Florida, home sellers made about $159,300 profit on the typical sale, a 51% increase from the year before, according to a year-end report released by Attom Data, a nationwide provider of property data.
It represents some of the highest price gains seen in our area since at least 2008, in spite of the housing market taking a slight downward turn in the fall of 2022.
2022 started off still riding the high of 2021, with high sales volume and low mortgage rates before seeing a deceleration when interest rates reached highs of at least 7%, almost double what they were at the height of the housing boom.
“There’s a big supply problem and that is what is keeping profitability up,” said Jeff Lichtenstein, founder of Echo Fine Properties in Palm Beach Gardens. “With the low inventory situation, it’s to be expected that we don’t have a big drop in prices.”
The “Year End-2022 U.S. Home Sales Report” looked at seller profit margins, return on investments, and cash sales and found that overall, despite home values dipping in the last half of the year, sellers still made out pretty well.
On a national level, home sellers made about a $112,000 profit on the typical sale last year, a 21% increase from the year before. It was also a 78% increase from the profit made in 2020.
And sellers’ return on investment also jumped: There was a 51.4% return on investment compared to the original purchase price in 2022 on the typical home.
That’s compared to the 44.6% investment return in 2021 last year and 32.8% investment return for 2020.
And Florida had some of the highest increases in investment returns out of the areas studied by Attom Data.
“We had so much movement into Florida that was way up from previous years,” Lichtenstein said. “It makes sense in terms of profitability, if you have demand exceeding supply, it will drive up prices.”
On average, a seller had been in their home for about six years in South Florida before selling it.
However, it’s likely that home seller profits have peaked for the time being.
“I think we will see prices getting adjusted slightly in the next month as the season gets further along,” Lichtenstein said. “Buyers are waiting for the market to adjust or waiting until next year.”
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