ATTOM Data Solution’s’ latest quarterly Home Flipping Report in Q3 2019 tells us that home flipping activity in Q3 2019 dropped more quarterly and annually than at any other time since Q3 2014. The number of flipped homes/condominiums in Q3 2019 was 56,566 homes, -12.9% from Q2 2019 and -6.8% from Q3 2018. Additionally, the share of flipped homes of all home sales in Q3 2019 was 5.4%, down from 6% in Q2 2019 but up from 5.2% in Q3 2018.
An eye-opening change in home flipping activity in Q3 2019, according to ATTOM’s latest Home Flipping Report, is that returns on investment is the second lowest ROI since 2011. In Q3 2019, the typically generated gross profit on home/condo flips was $64,900. This sum translates into a 40.6% ROI, down from 41.1% in Q2 2019 and down from 43.5% in Q3 2018.
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The median sale price for a flipped home in Q3 2019 was $224,900 and the median purchase price of the home to be flipped was $160,000.
The metros with the smallest profits of home flips in Q3 2019 included…
- Raleigh NC – $25,000
- Austin TX – $27,549
- Phoenix AZ – $31,135
- Las Vegas NV – $33,150
- Kansas City MO – $39,141
The metros with the largest profits of home flips in Q3 2019 included…
- Pittsburgh PA – +132.6%
- Scranton PA – +122.5%
- Flint MI – +111.2%
- Cleveland OH – +109.8%
- Hickory-Lennar NC – +109.3%
Another major change in home flipping activity in Q3 2019 was that flipped homes bought with mortgage financing dropped to 41.5% in Q3 2019 from 43.7% in Q2 2019 and 46% in Q3 2018. Conversely, home flips purchased with all cash increased to 58.5%, up from 56.3% in Q2 2019 and 54% in Q3 2018.
According to Maksin Stavinsky, co-founder and COO of Roc Capital, “We have been seeing a decline in projected realized profits for borrowers in projects despite the fact that borrower financing costs have been meaningfully coming down. This has lead to a much greater interest and activity in our rental programs. We expect these trends to continue.”
Because real estate is local, there are counties where at least 25% of all home sales were flipped homes in Q3 2019. Counties with the most active flipping rates included…
- Jefferson County AL – 38.3%
- Kings County CA – 37.9%
- Hidalgo County TX – 31.3%
- Miami-Dade County FL – 28.1%
- Burlington NJ – 27.0%
Thanks to ATTOM Data Solutions for source data.