Higher prices generate huge profits for home sellers in 2023

With higher prices and 6%-plus mortgage rates, the wealth gap widens between equity-rich homeowners and those struggling to purchase

California’s average home seller enjoyed a hard-to-imagine profit in 2023, thanks to home prices increasing for the 12th straight year.

The $695,000 average sale price – almost seven times the national average – created a hefty payday for home sellers and a huge headache for new homebuyers and renters pinching pennies to save enough money for a down payment to purchase a home.

Home sellers had impressive money-in-pocket gains from the Bay Area to the southern border, and everywhere in between. The average home seller had a profit of $324,800 based on an aggregate of the eight-largest metros in California – $200,000 more than the national average, according to ATTOM Data.


All eight of the metro areas exceeded the national average, from $135,000 in Bakersfield to $698,000 in San Jose, easily the largest profit in the U.S. Four of the nation’s five largest home seller profits were in California $476,000 in San Francisco, $354,000 in San Diego and $330,000 in Los Angeles.

The head-spinning profits are the latest evidence of a widening financial gap between homeowners with a ton of equity and netting nifty payouts when selling and struggling renters. (Profits are based on the purchase and the sales price and are greatly affected by how long owners remain in their home, see table, right, for the average tenure by region).

“Last year certainly stood out as another very good year for home sellers across most of the United States,” says Rob Barber, CEO of ATTOM. “Typical profits of over $120,000 and margins close to 60% (nationwide) were still more than double where they stood just five years earlier.”   

How long the average homeowner has their home

Bakersfield: 9.4 years
Fresno: 11.7 years
Los Angeles: 10.4 years
Riverside: 9.8 years
Sacramento: 10.7 years
San Diego: 11 years
San Francisco: 12 years
San Jose: 11.8 years

Source: ATTOM Data

The eight metros also beat the national average percentage profit of 57%, from a 65% gain in Sacramento to 99% in San Jose.

However, dollars and percentage profits were off slightly compared to 2022, including a 12% decline in prices and a 13.3% drop on a percentage basis in San Francisco. But no tears for San Francisco, please. The average homeowner in the City by the Bay enjoyed a 95% profit during the past decade (see table below for profits by metros).

“The market definitely softened amid modest price gains that weren’t enough to push profits up higher after a long run of improvements,” Barber says. “In 2024, the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but home ownership costs that remain a serious financial burden for many households.”

Profits slip in 2023 but remain near record high

RegionAverage profit% returnCompared to ’22
Los Angeles$330,00060%-7.0%
San Diego$354,00074.5%-0.8%
San Francisco$476,00079.5%-12.1%
San Jose$698,00099.4%-4.6%

Source: ATTOM Data


The big runup of home prices – a 105% increase during the past decade and 187% from the Great Recession – has generated wealth for owners. But becoming a homeowner and entering the equity party is the toughest in 16 years, according to the California Association of Realtors. 

Fewer than one of every seven households (15%) could afford to buy a median-priced home in California during the fourth quarter. The average buyer must earn at least $223,000 annually to qualify for a mortgage with a 20% down payment.

But as home prices inch higher, especially with a critical shortage of homes on the market, and mortgage rates remain above 6%, more families are willing to “buy the house and date the rate,” housing experts say.

“Consumers are more sensitive to the changes in rates than the absolute rates,” says Mike Simonsen, President of Altos Research. He adds that falling rates will help – and hurt – buyers. “There are a lot of buyers on the fence. When rates fall, the competition (for homes) could be worse.”

Home sales prices have more than doubled since 2013

RegionSale price% from a year ago% from 10 years ago% since the Great Recession
Los Angeles$880,000+0.6%+100%+155%
San Diego$830,000+2.6%+107.5%+172%
San Francisco$1.08 million-4.4%+94.7%+191%
San Jose$1.4 million0%+117%+211%

Source: ATTOM Data