ATTOM Data Solutions has reported that the typical Q1 home sale generated a profit of $70,050 nationwide, down from $75,750 in Q4 of 2020, but still up 26% from $55,750 in Q1 of 2020.
The typical home-sale profit of $70,050 represented a 34.2% return-on-investment (ROI) compared to the original purchase price–down from 37.1% in Q4 of 2020, but still higher than the 30.8% level recorded one year ago.
The rise in profit and profit margins in Q1 came as the national median home price decreased 2% from Q4 of 2020, to $275,000, but remained 16% higher than where it stood one year ago. Median values, measured annually, rose in 97% of markets around the country, jumping by at least 10% in more than three-quarters of them.
“The latest data on home prices and seller profits across the U.S. provide the latest markers of how the U.S. housing market keeps roaring ahead even as major parts of the broader economy try to overcome the impact of the pandemic,” said Todd Teta, Chief Product Officer at ATTOM Data Solutions. “However, the market did take a break from rising prices in the first quarter of 2021, and while that’s not unusual for the beginning of the year, it’s definitely something to keep on eye on as we move into the spring buying season. The next few months will speak huge volumes about whether the market keeps barreling ahead. For now, though, sellers remain in the driver’s seat, ringing up great profits.”
Regionally, the largest annual increases in profit margins came in two Tennessee markets, the metro area of Knoxville (up from 45% in Q1 of 2020 to 122.1% in Q1 of 2021) and Nashville (up from 48.2% to 92.1%); followed by Boise, Idaho (up from 60.6% to 102.8%); Crestview-Fort Walton Beach, Florida (up from 23.7% to 58.7%); and Chattanooga, Tennessee (up from 38.1% to 72.5%).
Aside from Nashville, the biggest annual profit-margin increases in metro areas with a population of at least one million were in Columbus, Ohio (margins up from 38.6% to 60.6%); Baltimore, Maryland (up from 19.9% to 41.1%); Phoenix, Arizona (up from 37.1% to 55.4%); and Seattle, Washington (up from 66.7% to 83.3%).
Conversely, profit margins dropped year-over-year in just 18 of the 149 metro areas analyzed (12%). The biggest decreases were found in another Tennessee market, the Memphis market, where margins were down from 34.8% to 8%). Memphis was followed by Columbus, Georgia (down from -3.4% to -17.6%); Prescott, Arizona (down from 48.9% to 36.4%); Barnstable, Massachusetts (down from 48.7% to 36.4%); and Santa Rosa, California (down from 56.4% to 48.1%).
Despite the economic fallout from the pandemic, median home prices in Q1 of 2021 surpassed figures from a year earlier in 97% of metropolitan statistical areas. Nationally, the median home price of $275,000 in Q1 was up 16% from $236,250 in Q1 of 2020, despite a 2% drop from the peak of $280,000 in Q4 of last year.
The biggest year-over-year increases in median home prices during the first quarter of 2021 came in Crestview-Fort Walton Beach, Florida (up 38%); East Stroudsburg, Pennsylvania (up 34%); Montgomery, Alabama (up 33%); Ocean City, New Jersey (up 31%); and Mobile, Alabama (up 31%).
The largest year-over-year declines in median prices during Q1 were found in Pittsburgh (down 10%); Harrisburg, Pennsylvania (down 2%); Charleston, South Carolina (down 2%); Santa Rosa, California (down less than 1%); and Brownsville, Texas (up less than 1%).
Click here to view ATTOM’s Q1 2021 U.S. Home Sales Report.