Seller Profits Strong YoY, But Saw Q2 Blip

In a break from historical trends, U.S. home-sale profits for sellers dipped in the second quarter of 2021—although they remain healthy YoY, according to a new report from ATTOM Data Solutions.

Key findings:

– A typical single-family home and condo sale in the U.S in Q2 generated a profit of about $94,500, an increase from $90k in Q1 and from $60,572 at the same time last year.

– For a median-priced condo, the average return on investment in Q2 declined to 44.9% from 48.4% in the first quarter.

“Prices and profits from the second quarter painted yet another picture of a housing market in high gear—except for one thing. Profit margins dropped in the second quarter, which is very unusual for any springtime period because that’s when the housing market is usually hottest or close to it,” said Todd Teta, chief product officer at ATTOM. “While it may just be a momentary thing in today’s volatile market, it’s definitely something to keep an eye on in case it’s a sign that the market is finally cooling or giving in to some of the economic forces connected to the virus pandemic.”

Annually, profit margins have improved in more than 80% of metros areas around the U.S. The biggest annual increases occurred in Boise City, Idaho, (margin up from 59.6% in the second quarter of 2020 to 124.3% in the second quarter of 2021); Charlottesville, Virginia, (up from 20.2% to 83.6%); Scranton, Pennsylvania, (up from 34.9% to 80.9%); Claremont-Lebanon, New Hampshire, (up from 18% to 57.3%); and Bellingham, Washington (up from 60.8% to 98%).

Profit margins decreased, YoY, in just 37 of the 195 metro areas analyzed (19%) but declined quarterly in 86 (44%). The biggest annual decreases were in San Jose, California, (margin down from 85.6% in Q2 2020 to 67.4% in the second quarter of 2021); Las Vegas, Nevada, (down from 45.8% to 30.5%); Kansas City, Missouri, (a dip from 41.4% to 26.5%); Myrtle Beach, South Carolina, (down from 26.6% to 11.7%); and Los Angeles, California (down from 55.7% to 41.3%).

Access the full report here.

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