According to Attom Data Solutions, in Q1 2019, home flipping reached its highest rate since Q1 2010. Homes flipped represented 7.8% of all home sales, were up from 5.9% in Q4 2018 and were up from 6.7% a year ago.
Though the sales volume of homes flipped was up, the average gross profit of $60,000/flip was down to the lowest gross since Q1 2016. With a median sales price of $215,000 and a median purchase price of $155,000, this gross profit of $60,000 represented 38.7% ROI to the original acquisition price, down from 42.5% ROI in Q4 2018 and down from 48.6% ROI in Q1 2018 to the lowest ROI level since Q3 2011.
Todd Teta, chief product officer with Attom, said, “With interest rates dropping and home price increases starting to ease, investors may be getting out (of house flipping) while the getting is good. While the home flipping rate is increasing, gross profits and ROI are starting to weaken and the number of investors that are flipping is down -11% from last year. So, if investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more.”
62% of 138 metros posted y/y increases in home flipping rates. Metros with the highest flipping rates in Q1 2019 included:
- Columbus GA – +83%
- Raleigh NC – +73% (new peak)
- Charlotte NC – +65%
- McAllen – Edinburg TX – +55%
- Milwaukee WI – +49%
- San Antonio TX – +47%
- Houston TX – +41%
- Atlanta GA – +38%
- Pittsburgh PA – +36%
Markets where investors were doubling their ROI included:
- Pittsburg – +131.2%
- Flint MI – +127.6%
- Shreveport LS – +112.5%
- Scranton PA – +112.0%
- Knoxville TN – +1-5.04
- Cleveland – +100.0%
- Philadelphia – +100.0%
Markets where investors generated the lowest flipping profits included:
- McAllen – Edinburg TX – $8,752
- Daphne AL – $15,761
- Boise City ID – $18,332
- Lexington KY – $20,000
- San Antonio TX – $23,596
There were eight zip codes where home flips accounted for +30% of all home sales in Q1 2019. Those zip codes included:
– 93212 in Kings County CA – 48.0%
– 11433 in Queens County NY – 35.7%
– 33147 in Miami Dade County FL – 32.7%
– 38115 in Shelby County TN – 32.4%
– 72801 in Orange County CA – 32.1$
Home flipping lending volume increased by +35% to a 12-year high of $6.4B in Q1 2019. San Diego, San Francisco, Denver and Boston all had +50% of completed flipped homes purchased with financing.
The average time to flip a house nationwide in Q1 2019 was 180 days.
