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September 26, 2019 at 8:00 AM EDT
Redfin Report: People Who Bought Homes in 2012 Have Earned a Total of $203 Billion in Equity
People who bought a home at the bottom of the market have earned a median $141,000 or 261% in home equity since 2012
 
 

SEATTLE, Sept. 26, 2019 /PRNewswire/ -- (NASDAQ: RDFN) — People who purchased homes in 2012 have earned a total of $203 billion in home equity, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. Individually, the typical homeowner who bought the year prices reached their lowest point following the Great Recession has earned $141,000, or 261 percent, in home equity.

 
 

Redfin Logo (PRNewsfoto/Redfin)

 
 

The typical home that sold in 2012 has increased $110,000 in value, from a median sale price of $210,000 in 2012 to an estimated value of $320,000 in September 2019. The typical 2012 homebuyer started off with $54,000 in home equity and has $195,000 today.

The report is based on a Redfin analysis of the home equity earned from roughly 1.4 million homes purchased across 138 markets in the U.S. in 2012.

"The opportunity to build wealth through home equity when prices hit their low point was available only to a fortunate subset of Americans who had enough cash for a down payment," said Redfin chief economist Daryl Fairweather. "And now many people who weren't able to buy into homeownership during that window of time find themselves on the other side of the housing market coin: Many areas are just plain unaffordable for people who don't have equity built up to trade in for a new home. And those who are waiting in the wings, hoping to buy a home when the next recession hits, probably won't be as lucky as buyers were in 2012. Even if home prices do come down slightly, the housing market won't be impacted nearly as much as it was during the Great Recession and home equity gains won't be nearly as big."

The massive 12-figure total equity growth is driven by large, expensive coastal markets—mostly in California—where home values have increased by at least two-thirds and the typical homeowner has earned more than $300,000 in equity since 2012. The metros with the biggest total home equity gains in dollars are Los Angeles ($15 billion), Seattle ($8 billion) and Oakland ($7.9 billion).

 
                                                                                                     
 

Top 10 metro areas with the most total equity growth in dollars, from 2012 to 2019

 
 

Metro area

 
 

Median
Home Equity
Growth in
Dollars

 
 

Median
Home Equity
Percent
Growth

 
 

Total Equity
Growth

 
 

Median Home
Value Dollar
Growth

 
 

Median Home
Value Percent
Growth

 
 

Los
Angeles,
CA

 
 

$318,000

 
 

292%

 
 

$15,000,000,000

 
 

$265,000

 
 

67%

 
 

Seattle, WA

 
 

$364,000

 
 

461%

 
 

$8,010,000,000

 
 

$313,000

 
 

88%

 
 

Oakland,
CA

 
 

$461,000

 
 

369%

 
 

$7,920,000,000

 
 

$406,000

 
 

92%

 
 

San Jose,
CA

 
 

$669,000

 
 

360%

 
 

$7,610,000,000

 
 

$596,000

 
 

98%

 
 

Denver, CO

 
 

$222,000

 
 

555%

 
 

$7,210,000,000

 
 

$180,000

 
 

72%

 
 

Phoenix, AZ

 
 

$133,000

 
 

238%

 
 

$6,820,000,000

 
 

$110,000

 
 

68%

 
 

San
Francisco,
CA

 
 

$741,000

 
 

329%

 
 

$6,410,000,000

 
 

$644,000

 
 

92%

 
 

Anaheim,
CA

 
 

$311,000

 
 

219%

 
 

$6,290,000,000

 
 

$252,000

 
 

53%

 
 

San Diego,
CA

 
 

$283,000

 
 

277%

 
 

$6,140,000,000

 
 

$232,000

 
 

60%

 
 

Washington,
D.C.

 
 

$148,000

 
 

296%

 
 

$5,760,000,000

 
 

$98,000

 
 

27%

 
 

National

 
 

$141,000

 
 

261%

 
 

$203,000,000,000

 
 

$110,000

 
 

52%

 
 
 

The list of places with the biggest percent increases in home equity includes many metros near large U.S. military bases, including Tacoma, Washington (1453%) and Virginia Beach (1333%), home to the largest concentration of military personnel outside of the Pentagon. That commonality is partly explained by the fact that a lot of homebuyers in those areas would have been able to take advantage of a loan from the U.S. Department of Veterans Affairs (known as a VA loan) or from the Federal Housing Administration (FHA), which often have small or no down-payment requirements, meaning their home equity started out particularly low in 2012.

"Just like many other places around the country, the Hampton Roads area, which includes Virginia Beach, was hit hard during the Great Recession. But because there's such a large military presence in Virginia Beach and its surrounding cities, our housing market will always be one of the most stable in the country," said local Redfin agent Jordan Hammond. "People in the military are able to obtain VA loans, and military buyers are also often able to obtain low interest rates. That turned out to be hugely beneficial for people in the area who bought homes in the wake of the recession."

Ellen Campion, a Redfin agent in Tacoma, said the housing market in her area is large enough that the military population is just one of many factors that have contributed to massive home-equity growth. "Buyers were paying too much in 2005 and 2006, and once the recession hit, a lot of those people unfortunately had their homes foreclosed on," Campion said. "So during and after the recession, folks were desperate and had to sell their homes for less than what they paid, and investors and savvy homebuyers snapped them up, often with the help of FHA loans. Now we're in a situation where it's the best of all worlds for sellers who bought homes back around 2012. The Tacoma market is so hot right now that those sellers are often able to earn six figures by selling average homes."

 
                                                                                     
 

Top 10 metro areas with the biggest median percent home-equity growth, from 2012 to 2019

 
 

Metro area

 
 

Median
Home
Equity
Growth

 
 

Median Home
Equity Percent
Growth

 
 

Total Equity
Growth

 
 

Median Home
Value Dollar
Growth

 
 

Median Home
Value Percent
Growth

 
 

Tacoma,
WA

 
 

$218,000

 
 

1453%

 
 

$953,000,000

 
 

$165,000

 
 

76%

 
 

Virginia
Beach, VA

 
 

$80,000

 
 

1333%

 
 

$758,000,000

 
 

$44,000

 
 

21%

 
 

Greeley, CO

 
 

$192,000

 
 

1067%

 
 

$459,000,000

 
 

$157,000

 
 

84%

 
 

Spartanburg,
SC

 
 

$79,000

 
 

790%

 
 

$131,000,000

 
 

$58,000

 
 

47%

 
 

Salem, OR

 
 

$164,000

 
 

781%

 
 

$319,000,000

 
 

$131,000

 
 

80%

 
 

Modesto,
CA

 
 

$200,000

 
 

769%

 
 

$484,000,000

 
 

$169,000

 
 

112%

 
 

Colorado
Springs, CO

 
 

$149,000

 
 

677%

 
 

$859,000,000

 
 

$117,000

 
 

57%

 
 

Stockton,
CA

 
 

$225,000

 
 

643%

 
 

$700,000,000

 
 

$189,000

 
 

107%

 
 

Bremerton,
WA

 
 

$204,000

 
 

638%

 
 

$382,000,000

 
 

$159,000

 
 

62%

 
 
 

Nine of the 10 metros with the biggest median home equity growth in dollars are in California, led by San Francisco ($741,000), San Jose ($669,000) and San Rafael ($604,000). Seattle ($364,000), is the only non-California metro on the list.

Compared with the metros with the highest percent equity growth, these areas all started in 2012 with high home prices, and local homebuyers likely made much higher down payment--close to 20 percent. Since then, Coastal California and Seattle have seen enormous growth in home values, which equates to huge dollar gains in equity.

 
                                                                                             
 

Top 10 metro areas with the biggest dollar home-equity growth, from 2012 to 2019

 
 

Metro
area

 
 

Median
Home
Equity
Growth

 
 

Median Home
Equity Percent
Growth

 
 

Total Equity
Growth

 
 

Median Home
Value Dollar
Growth

 
 

Median Home
Value Percent
Growth

 
 

San
Francisco,
CA

 
 

$741,000

 
 

329%

 
 

$6,410,000,000

 
 

$644,000

 
 

92%

 
 

San Jose,
CA

 
 

$669,000

 
 

360%

 
 

$7,610,000,000

 
 

$596,000

 
 

98%

 
 

San Rafael,
CA

 
 

$604,000

 
 

247%

 
 

$1,190,000,000

 
 

$495,000

 
 

71%

 
 

Oakland,
CA

 
 

$461,000

 
 

369%

 
 

$7,920,000,000

 
 

$406,000

 
 

92%

 
 

Seattle,
WA

 
 

$364,000

 
 

461%

 
 

$8,010,000,000

 
 

$313,000

 
 

88%

 
 

Santa Rosa,
CA

 
 

$350,000

 
 

318%

 
 

$1,200,000,000

 
 

$292,000

 
 

81%

 
 

Salinas,
CA

 
 

$322,000

 
 

322%

 
 

$656,000,000

 
 

$282,000

 
 

83%

 
 

Los
Angeles,
CA

 
 

$318,000

 
 

292%

 
 

$15,000,000,000

 
 

$265,000

 
 

67%

 
 

Anaheim,
CA

 
 

$311,000

 
 

219%

 
 

$6,290,000,000

 
 

$252,000

 
 

53%

 
 

Santa
Maria, CA

 
 

$297,000

 
 

230%

 
 

$593,000,000

 
 

$228,000

 
 

52%

 
 
 

To read the report, including the full methodology and list of metro-level home equity data, please visit: https://www.redfin.com/blog/home-equity-gain-after-great-recession.

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. and Canada. The company has closed more than $85 billion in home sales.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, subscribe here. To view Redfin's press center, click here.

 

 
 
 

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SOURCE Redfin

Redfin Journalist Services: Erin Osgood, 206-588-6863, press@redfin.com