- December 7, 2018
- More investors are starting to back away from flipping homes as home price gains slow. The average home flipping returns dropped to a 6.5-year low in the third quarter, and the share of flips was down 12 percent, according to a newly released report from ATTOM Data Solutions, a real estate data provider.
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- A total of 45,901 single-family homes and condos were flipped in the third quarter, the lowest level since the first quarter of 2015. Homes flipped in the third quarter comprised 5 percent of all single-family home and condo sales during the quarter.
- “Home flipping acts as a canary in the coal mine for a cooling housing market because the high velocity of transactions provides home flippers with some of the best and most real-time data on how the market is trending,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “We’ve now seen three consecutive quarters with year-over-year decreases in home flips.” Blomquist says the last time this occurred was in 2014, following a jump in mortgage rates during the second half of 2013.
- Homes that were flipped in third quarter sold for an average of $63,000 more than what the home flipper purchased them for, which is down from a record high average gross flipping profit of $68,000 in the first quarter, according to the report.
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- The metro areas (with populations of at least 200,000) that posted the highest average gross flipping returns in the third quarter were: Pittsburgh (136.7%); Cleveland (120.2%); Atlantic City, N.J. (110.3%); Scranton, Pa. (109%); and Philadelphia (107.9%).
- The metros with the overall highest home flipping rates in the third quarter were: Memphis, Tenn. (10.4%); Atlantic City, N.J. (9.1%); Phoenix (8.6%); Las Vegas (7.8%); and Huntsville, Ala. (7.5%).
- ATTOM Data Solutions’ report on flipped homes purchased in third quarter also observed that:
- * The median year built of homes flipped in the third quarter was 1978.
- * The median square footage of homes flipped was 1,408, the smallest median square footage dating back to the first quarter of 2000.
- * The average time to complete a home flip was 179 days, down slightly from 180 days a year ago.
- Source:
- “U.S. Home Flips Down 12 Percent in Q3 2018 to 3.5-Year Low,” ATTOM Data Solutions (Dec. 5, 2018)