For the first time since 2008, Q2 returns on some home investments dipped nationally, though generally profit margins remain high. That’s the news coming out of ATTOM, property database curator, via their Q2 2021 U.S. Home Sales Report.
The report reveals that the typical single-family home and condo sale across the country during the second quarter of 2021 generated a profit of $94,500. That’s up from $90,000 in the first quarter of 2021 and up from $60,572 in the second quarter of 2020.
However, the profit margin on median-priced houses or condos declined from 48.4 percent in the first quarter of this year to 44.9 percent in Q2. ATTOM notes that the profit margin still remained 13 percent above Q2 of 2020, it does represent an unusual decline.
The report goes on to explain that profits dropped this past quarter because price gains were smaller than increases that recent sellers had been paying when they originally bought their homes. The gap between the latest price gains and earlier increases caused the dip in profit margins.
“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.”
The biggest annual increases in profit margins came in the metro areas of Boise City, ID; Charlottesville, VA; Scranton, PA; Claremont-Lebanon, NH; Bellingham, WA.
The biggest annual decreases were in San Jose; Las Vegas; Kansas City, MO; Myrtle Beach, SC and Los Angeles. Even still, ATTOM reports that the West continues to have the largest profit margins on typical home sales around the country.
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