Home flipping in 2021 increased +26% y/y while gross profits on flipped homes dropped at the fastest pace in more than 15 years.
Number of Home Flips in 2021 Increased
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ATTOM’s Year-End 2021 US Home Flipping Report indicated that 323,465 single-family homes and condos were flipped during 2021.
These 323,465 home flips represent an increase of +26% y/y to the highest level of flipped homes since 2006. These home flips represented 5.5% of all home sales during 2021, down from 5.8% in 2020 and down from 6.1% in 2019.
As Quick Flipped Home Sales Increased, Gross Margins Declined
Flipped homes during 2021 generated a gross profit of $65,000 (the difference of the median sales price and the median amount paid by investors). This $65,000 gross margin translated into a 31% return on investment (ROI), the lowest gross margin since 2008. $65,000 also represented the steepest drop in ROI since at least 2005.
“While gross profits were lower for fix-and-flip investors in 2021, there may have been offsets that protected net profits,” said Rick Sharga, ATTOM’s now executive vice president of market intelligence. “Fewer flippers financed their purchases, so their cost of capital was lower. It took less time to execute a flip, reducing holding costs, and suggesting that less extensive – and less expensive – repairs were needed to bring the properties to market.”
Home Flipping Rates Increased from 2020 to 2021 in 47% of Metro Areas
Metro areas with the largest annual increases in flipped homes included:
- Provo UT – +114.3%
- Salt Lake City UT – +113.4%
- Austin TX – +111.2%
- College Station TX – +97.4%
- Ogden UT – +95%
Metro areas with the largest annual decreases in flipped homes included:
- Honolulu HI – -83%
- Atlantic City NJ – -73%
- Manchester NH – -57.7%
- Rochester NY – -48%
- Cedar Rapids IA – -47.8%
There were 25 counties where home flips accounted for +10% of all home sales. The top five counties among this group included:
- McCurtain County OK (northeast of Dallas TX) – 15%
- Logan County KY (north of Nashville TN) – 13%
- Gilmer County GA (northwest of Marietta) – 12.1%
- Fentress County TN (northwest of Knoxville) – 12.1%
- Greene County GA (south of Athens) – 11.1%
There were 13 zip codes where flips accounted for +20% of all home sales. The top five zip codes among this group included:
- 78701 in Travis County (Austin) TX – 31.4%
- 44730 in Stark County (Canton) OH – 27.8%
- 78705 in Travis County (Austin) TX – 27.3%
- 48205 in Wayne County (Detroit) MI – 25.3%
- 48227 in Wayne County (Detroit) MI – 23.1%
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Thanks to ATTOM.