Profit margins for flipped homes in Q1 2022 fell for the sixth consecutive quarter to $67,000, or just a 25.8% ROI, the lowest ROI since Q1 2009.
Q1 2022 ROI on Flipped Homes Less than Half of Peak ROI in Q4 2016
According to ATTOM’s just released Q1 2022 Home Flipping Report, the latest return on investment (ROI) on flipped single-family homes and condominiums was $67,000, just a 25.8% ROI nationally.
This 25.8% ROI in Q1 2022 was down from 27.3% ROI in Q4 2021 and from 38.9% ROI in Q1 2021. Q1 2022’s ROI was actually the lowest ROI for flipped properties since Q1 2009.
For comparison, this latest ROI was less than half the peak of 53.1% of the 2000’s in Q4 2016.
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Meanwhile, the median home price on flipped properties in Q1 2022 hit an all-time high of $327,000. This $327,000 represents an increase of +10.5% from $296,000 in Q4 2021 and 30.8% from $250,000 one year ago.
Flipping Rates Up in 95% of Local Markets
As we mentioned in this week’s corollary article on home flipping, “Highest Rate Ever…”, home flips as a portion of all home sales in Q1 2022 increased in 95% or 181 of the 191 metros analyzed by ATTOM for this latest home flipping report.
Metros with the largest flipping rates overall in Q1 2022 included:
- Phoenix AZ – 18.7% of all home sales
- Charlotte NC – 18%
- Tucson AZ – 16.2%
- Atlanta GA – 16.2%
- Jacksonville FL – 16%
Metros with populations of less than 1M with the largest flipping rates included:
- Durham NC – 15.3% of all home sales
- Gainesville FL – 14.9%
- Ogden UT – 13.9%
- Clarksville TN – 13.4%’Winston-Salem NC – 13.4%
Metros with the smallest flipping rates in Q1 2022 included:
- Olympia WA – 4.4% of all home sales
- Boise ID – 4.4%
- Portland ME – 4.6%
- Salem OR – 4.7%
- Syracuse NY – 4.7%
- Davenport IA – 4.9%
- Fort Collins CO – 5.7%
- College Station TX – 7.2%
- Sacramento CA – 9%
- Santa Rosa – 9.6%
ROI Home Flipping Decreased in 75% of Metros in Q1 2022
The median investor purchase price of $260,000 saw home flipping returns drop nationwide during Q1 2022 in 75% of metros. The median $327,000 resale flipped home price in Q1 2022 resulted in a 25.8% ROI
Metros seeing the biggest annual declines of ROI in Q1 2022 included:
- Salisbury MD – from 173.7% ROI in Q1 2021 to 29.3% ROI in Q1 2022
- Elkhart IN – down from 148.9% to 24.9%
- Macon GA – down from 120.7% to 50.9%
- Lynchburg VA – down from 96.2% to 31.5%
- Flint MI – down from 126.2% to 64%
Markets seeing the largest annual increase of ROI in Q1 2022 included:
- Scranton PA – 115.5%
- Kingsport TN – 114%
- Reading PA – 108.6%
- Pittsburgh PA – 105.7%
- Johnson City TN – 101.1%
- Buffalo NY – 88.2%
- Philadelphia PA – 80.3%
- Richmond VA – 79%
- New Orleans LA – 69.9%
Nearly Two-Thirds of Flipped Homes Purchased with Cash by Investors in Q1 2022
Nationwide, according to ATTOM’s Q1 2022 Home Flipping Report, 62.7% of homes flipped in Q1 2022 were purchased by investors with cash.
ATTOM’s Rick Sharga, executive vice president of market intelligence, said, “As interest rates continue to go up, cash buyers should be in an even greater position of competitive advantage in the fix-and-flip market. It will be interesting to see if the percentage of cash purchases, and purchases made by larger, better capitalized investors, increases over the next few quarters.”
Cash buyers were particularly active in these metros:
- Buffalo NY – 86.4% of all sales purchased with cash
- Detroit MI – 84%
- Tucson AZ – 78.1%
- Cincinnati OH – 76.5%
- Raleigh NC – 76.5%
Thanks to ATTOM.
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