Home Selling Profits Dip In 2023

Selling profits
In a transition year for the housing market, 2023 saw home profits dip.

While 2023 remained a favorable year for home sellers overall, there was a noticeable shift compared to the previous year. For the first time since 2011, home selling profits saw a decline, marking a change in the market dynamics that had favored sellers for quite some time. We dive into some of the data below.

The decline in home selling profits

  • Profit Margins Down: ATTOM Data Solutions, a leading real estate data provider, reported that the median profit margin for home sellers dropped from 59.8% in 2022 to 56.5% in 2023. This translates to a decrease in the average gross profit from $122,600 to $121,000.
  • Slower Price Growth: The national median home price did witness a 2.3% increase in 2023. However, this fell short of the typical 4.4% appreciation recent sellers had experienced when purchasing their homes. This gap between selling and buying price growth contributed to the profit decline.
  • The Impact: While the decline was observed nationwide, certain regions experienced a sharper drop. The South and West saw the most significant profit margin decrease, with cities like Port St. Lucie, FL, Austin, TX, and Phoenix, AZ witnessing notable falls.

Possible reasons for the shift in home selling profits

  • Rising Mortgage Rates: Throughout 2023, mortgage rates climbed steadily, which could have potentially dampened buyer demand and put downward pressure on sale prices.
  • Shifting Market Dynamics: The once-hot seller’s market might be experiencing a slight correction, bringing more balance between buyers and sellers.

Summary

If you’re considering selling your home, it’s essential to stay informed about current market trends. While profits might not be as high as they were in the past couple of years, the housing market still offers opportunities for sellers. Here are some key takeaways:

  • Consult a professional: Connect with a local real estate agent who can provide valuable insights into your specific market and help you price your home competitively.
  • Prepare for a balanced market: Be prepared for buyer negotiations and understand that the days of receiving multiple offers above asking price might be less common.
  • Focus on presentation and marketability: Make sure your home is well-maintained and staged to attract potential buyers.

Are thinking about buying or selling in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.