ATTOM Data Solutions’ latest Q3 2018 Home Flipping Report tells us that the number of homes flipped, 45,901, in Q3 2018 fell by -12% compared to the same time period one year ago. It turns out this level of flipping activity fell to the lowest level since Q1 2015, a 3.5 year low.
Additionally, the number of houses flipped in Q3 2018 represented 5.0% of all single-family homes and condos sold in Q3, down from 5.2% of sales in Q2 2018 and down from 5.1% of sales in Q3 2017. To sum it up, this number of flipped houses representing 5% of all single-family and condos sales was the lowest level since Q3 2006.
Alan Blomquist, senior vice president of ATTOM, said, “Home flipping acts as a canary in a coal mine for cooling housing models 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. We’ve now seen three consecutive quarters with y/y decreases in home flips. The last time that happened in 2014 following mortgage rate growth in the second half of 2013, but it’s still far from the 11 consecutive quarters which led up to the last housing crisis.”
With an average gross profit of $63,000 on a flipped home in Q3 2018, this is the lowest average ROI on a flipped home since Q1 2012, 6.5 years ago.
One third (31.6%) of flipped homes sold for $100,000 – $200,000. The gross ROI in this price range was 58%. Flipped homes that sold for +$5M (a scant 0.1%) saw the highest gross ROI of any price range, +187%.
States having the highest average gross flipping ROI in Q3 2018 included
- Pennsylvania – +96.7%
- Ohio – +90.4%
- Kentucky – +84.7%
- Louisiana – +82.4%
- Michigan – +78.6%
States with the highest sales rates of homes flipped included
- Arizona – 7.7%
- Tennessee – 7.5%
- Nevada – 7.2%
- Alabama – 6.6%
- Maryland – 6.0%
Metros with +200,000 people with the highest sales rates of flipped homes were
- Memphis – 10.4%
- Atlantic City – 9.1%
- Phoenix – 8.6%
- Las Vegas – 7.8%
- Huntsville – 7.5%
The share of flipped homes sold to FHA borrowers, likely first-time buyers, was 12.2%, the lowest rate in 10 years.
The median year a flipped house was built was 1978 in Q3 2018, the third consecutive quarter for the oldest median year built as far back as data was available in Q1 2000. The median square footage of a flipped house was 1,408, the smallest since data was available in Q1 2000. And, the average time to complete the flip from start to finish was 179 days, faster than any other quarter in 2018 and one day faster than Q3 2017.