Baltimore is one of the worst metros to make money from selling a house, Zillow says
Staff and wire reports|
Sep 07, 2017 | 2:05 PM
The typical San Diego County home seller made $125,000 on the sale of their home last year, said a Zillow study released Wednesday.
But the payout, during a time of increasing prices throughout the nation, was a lower percentage than more than a dozen major metros. In general, it paid off to hold on to a home for at least eight years to get a better return.
The real estate website crunched the numbers on 33 metros and found the best return on investments for homes have been in Oakland, where homeowners saw a 78 percent return on what they originally paid, or Portland, with 64 percent earned.
San Diego County ranked No. 17 as the best return for buyers, with a 33 percent jump, behind Nashville, Mesa, Philadelphia, Phoenix and other cities.
The Zillow study said in eight years and 11 months (typical length of stay for a San Diego owner) a seller earned $16,000 per year on their investment when they sold in 2016.
In just dollars, not percentage gain, San Jose had the best return on investment with sellers pocketing $271,150 after nine years and 8 months of ownership.
Zillow said the worst return on investment for home sellers was in Baltimore with a 5.4 percent payout, or $5,000. But, home sellers there held on to homes the least of any region studied — just three years and five months.
The factors for determining profit on a home could be legion: Costs to repair a home while living in it, insurance issues, avoiding paying rent while owning and the ability to buy another home after selling.
Zillow economist Sarah Mikhitarian said the study did not adjust for opportunity costs, such as what a person would do with their money if they didn't buy a house. Zillow also does not include inflation — and neither do most housing return studies — because assets, like stocks, typically aren't inflation-adjusted at the time of the sale.
A median priced home in San Diego County in 2007 was $477,000, according to CoreLogic. After the housing crash, it had risen to $490,000 in 2016.