In the second quarter of 2024, a report from ATTOM revealed that three out of the five metropolitan areas with the largest declines in typical profit margins, which represent the percentage return on investment, are located in Florida.
The most significant year-over-year decrease in profit margins was observed in Hilo, Hawaii, with homeowners’ margins dropping from 80.5 percent to 45.3 percent. Following Hilo, Port St. Lucie, Florida saw a decline from 95 percent to 73.9 percent, Daphne-Fairhope, Alabama declined from 49.8 percent to 34 percent, Crestview-Fort Walton Beach, Florida dropped from 60.7 percent to 45.1 percent, and Naples, Florida decreased from 84.9 percent to 69.2 percent.
According to the Q2 2024 Home Sales Report by ATTOM, the decline in profit margins predominantly affected higher-end housing markets where home values exceeded $350,000. Around three quarters of these markets experienced a decline in margins compared to approximately half of lower-priced markets.
In the analysis of 160 metropolitan statistical areas, 94 metro areas saw an increase in profit margins from the first quarter to the second. However, 100 metros still exhibited low margins even after the increase, as per ATTOM’s findings.
Nationally, profit margins remained relatively stable from the first to the second quarter of the year, with sellers earning a 55.8 percent profit margin on single-family home and condo sales. This stability was observed despite the significant rise in home prices across the United States, with a median sale price of $442,479 in June—a 4 percent increase year-over-year.
In Florida, areas like North Port and Cape Coral are witnessing price decreases due to growing inventory, making it challenging for homeowners to profit from the increased value of their properties. For instance, Crestview’s median sale price was $298,345 in June, a decrease of 9.59 percent year-over-year, while Fort Walton saw a 6.4 percent price increase to $372,500 during the same period. Naples had a median home price of $707,500 in June, representing a 3.1 percent decrease from the previous year.
Port St. Lucie recorded a median sale price of $417,165, up by 5.6 percent year-on-year. Statewide, Florida’s median sale price in June was up by 2.3 percent year-over-year to $419,000.
On the positive side, the biggest improvements in returns on investment were seen in Syracuse, New York; Rockford, Illinois; Scranton, Pennsylvania; Lansing, Michigan; and Roanoke, Virginia, according to ATTOM’s data.