Average profits for home sellers across the country dipped further in the first quarter, with Los Angeles faring worse than the rest of the nation.
National average profit margin on home sales fell to 50 percent in the first quarter, with the Los Angeles-Long Beach-Anaheim metro seeing its average profit margin on home sales drop to under 55 percent, L.A. Business First reported, citing a new report from Attom.
The L.A. area numbers mark a 3.7 percent decrease from the fourth quarter of last year and a 6.8 percent dip from the first quarter of last year. Local average profit margin on home sales hit a peak in recent years of 75 percent in the second quarter of 2022.
While the national average profit margin for home sales has been declining almost every summer since 2022, the margins are still well above pre-pandemic levels, Attom said.
“Sellers may not be enjoying quite the same windfall they were a few years ago, but by historic standards, profits are still strong, both in terms of margins and raw dollar value,” Rob Barber, CEO of Attom, told Business First. “The first quarter also tends to be the weakest of the year, so don’t be surprised to see profits regain ground during the summer months.”
Los Angeles metro wasn’t the only California enclave to see a dip in average home sale profit margins.
Bakersfield, for example, saw its average home sale profit margin sink dramatically to 58.9 percent in the first quarter of this year from 81.1 percent in the first quarter of last year, marking a 22.2 percent decrease. In that same period, San Jose’s average profit margin fell 16.2 percentage points, Fresno saw a 14.2 percent hit and San Francisco’s fell 14 percent.
While California saw its downward trend continue with regard to home sale profit margins, Florida fared worse than the Golden State.
Punta Gorda, Florida, fell to 69.2 percent in the first quarter from 106.3 percent in the first quarter of last year, followed by Ocala, at 66.7 percent, which tumbled year-over-year from 99.9 percent. The Deltona-Daytona Beach area saw a drop to 54 percent from 81.6 percent. Port Saint Lucie dipped to 62.6 percent from 79.8 percent a year earlier.