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By Giulia Carbonaro
Senior Reporter
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Three of the five metropolitan areas which saw the biggest year-on-year drops in typical profit margins—the percentage return on investment—in the second quarter of 2024 are in Florida, according to a new report from ATTOM.
The biggest year-over-year decrease in typical profit margins—which can be calculated as the percentage difference between median purchase and resale prices—was recorded by ATTOM in the metropolitan area of Hilo, Hawaii, where the homeowners' margin was down from 80.5 percent in the second quarter of 2023 to 45.3 percent in the second quarter of 2024.
It was followed by Port St. Lucie, Florida (down from 95 percent to 73.9 percent); Daphne-Fairhope, Alabama (down from 49.8 percent to 34 percent); Crestview-Fort Walton Beach, Florida (down from 60.7 percent to 45.1 percent); and Naples, Florida (down from 84.9 percent to 69.2 percent).
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"The higher end of the housing market—metro areas where home values mostly topped $350,000—absorbed the brunt of the year-over-year softening of profit margins," ATTOM experts wrote in the Q2 2024 Home Sales Report. "About three quarters of those areas saw typical margins decline compared to about half of lower-priced markets."
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Typical profit margins increased from the first quarter of the year to the second in 94 of the 160 metropolitan statistical areas analyzed by ATTOM. But margins remained low in 100 of these metros, the company wrote.
At the national level, typical profit margins remained mostly unchanged from the first quarter of the year to the second, with home sellers earning a 55.8 percent profit margin on typical single-family home and condo sales between April and June.
That's despite the fact that home prices have shot up this year across the U.S. According to Redfin data, the median sale price of a home was $442,479 in June, up 4 percent compared to a year earlier. Prices have been steadily growing year-over-year since July 2023, when the modest price correction of the housing market came to an end.
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This chart, provided by Statista, shows the median home sales price in the U.S. per month.
In Florida, where there are several cities like North Port and Cape Coral where prices are falling because of growing inventory, it's even harder for homeowners to make a profit out of the renewed price of their property, for which they've likely spent more when they originally bought it.
The median sale price of a home in Crestview, Florida, was $298,345 in June, down 9.59 percent year-over-year, according to Redfin. In Fort Walton, Florida, prices were up 6.4 percent year-over-year in June, at $372,500. In Naples, the median price of a home in June was $707,500, down 3.1 percent compared to a year earlier.
In Port St. Lucie, the median sale price of a home was $417,165, up 5.6 percent year-over-year. At the state level, the median sale price of a home in Florida was up 2.3 percent year-over-year in June, at $419,000.
The biggest year-over-year improvements in returns on investment were recorded by ATTOM in Syracuse, New York (margin up from 51.6 percent in the second quarter of 2023 to 71.8 percent in the second quarter of 2024); Rockford, Illinois (up from 54.8 percent to 74.5 percent); Scranton, Pennsylvania (up from 79.9 percent to 97.7 percent); Lansing, Michigan (up from 50.1 percent to 62.7 percent); and Roanoke, Virginia (up from 45.1 percent to 56.1 percent).
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