Top 10 MSAs with Greatest Annual Increases in Profit Margins on Home Seller Gains
ATTOM Data Solutions’ newly released Q2 2020 U.S. Home Sales Report revealed that nationwide home sellers realized a gain of $75,971 on the typical sale, marking another peak level of raw profits in the U.S. since the housing market began recovering from the Great Recession in 2012. The report noted that latest figure, based on median purchase and resale prices, is up from $66,500 in Q1 2020 and from $65,250 in Q2 2019.
According to ATTOM’s most recent home sales analysis, the typical $75,971 home-sale profit represented a 36.3 percent return on investment compared to the original purchase price. That percentage is up from 34.5 percent in Q1 2020 and from 33.7 percent in Q2 2019, to another post-Recession high.
The analysis reported that the latest increases in profits and profit margins came as median home prices increased, year over year, in almost every market around the country with enough data to analyze, rising by at least 5 percent in more than half those markets. The report noted that prices and returns rose despite the economic damage caused by the worldwide Coronavirus pandemic.
ATTOM’s Q2 2020 home sales report cited the typical profit margins – the percent change between median purchase and resale prices – rose from Q2 2019 to Q2 2020 in 78 percent or 81 of the 104 U.S. metro areas with at least 1,000 single-family home and condo sales in Q2 2020.
Also according to the report, the biggest annual increases in profit margins came in Spokane, WA (margin up from 61.2 percent to 76 percent); Columbus, OH (up from 34 percent to 47 percent); St. Louis, MO (up from 19.9 percent to 31.4 percent); Chattanooga, TN (up from 31.9 percent to 43.4 percent) and Indianapolis, IN (up from 30.5 percent to 41.9 percent).
In this post, we round out the top 10 metro areas with at least 1,000 single-family home and condo sales in Q2 2020 with the biggest annual increases in profit margins. The other areas making up the top 10 include: Canton-Massillon, OH (margin up from 23.8 percent to 34.6 percent); Greensboro-High Point, NC (margin up from 13.3 percent to 23.4 percent); Rochester, NY (margin up from 24.1 percent to 34.2 percent); Kansas City, MO-KS (margin up from 38.6 percent to 48.6 percent); and Birmingham-Hoover, AL (margin up from 11.4 percent to 21.2 percent).
ATTOM’s Q2 2020 home sales analysis also noted that aside from Columbus, St. Louis and Indianapolis, the biggest increases in metro areas with a population of at least 1 million were in Rochester, NY (up from 24.1 percent to 34.2 percent) and Kansas City, MO (up from 38.6 percent to 48.6 percent).
The reported stated that profit margins dropped in 22 percent or 23 of the 104 metro areas analyzed, with the biggest decreases in Pittsburgh, PA (down from 28.6 percent to 20.9 percent); Modesto, CA (down from 58.7 percent to 51.1 percent); Honolulu, HI (down from 43.8 percent to 36.2 percent); Greeley, CO (down from 41.5 percent to 35.4 percent) and Naples, FL (down from 22.1 percent to 16.7 percent).
Among those metro areas with a population of at least 1 million, the biggest decreases aside from Pittsburgh, were in Denver, CO (down from 49.1 percent to 44.4 percent); Grand Rapids, MI (down from 52.8 percent to 49.3 percent); San Francisco, CA (down from 73.3 percent to 70 percent) and Boston, MA (down from 51.2 percent to 48.3 percent).
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