Investors committed to US home flips despite weaker returns

by Steve Randall09 Mar 2020

Home flipping across the US reached multi-year highs in 2019 as both overall flips and those that were financed increased year-over-year.

Stats from ATTOM Data Solutions show that 245,864 single family homes and condos were flipped in 2019, up 2% year-over-year to the highest point since 2006.

The share of all US home sales that were flipped last year was 6.2%, the highest share in 8 years and up from 5.8% in 2018 and 5.7% in 2017.

Nationally, the percentage of flipped homes purchased with financing dipped in 2019 to 43.8%, from 45.9% in 2018, but was up from 42.9% two years ago.

The share of flips that were bought with all-cash was 56.2%, up from 54.1% in 2018 but down from 57.1% in 2017.

But returns were down 3.2% year-over-year with the average flip generating a gross profit of US$62,900 nationwide, an 8-year low. In 2018, it was $65,000 and in 2017 it was $66,899, the highest post-recession.

"Home-flipping profits across the US dropped again in 2019 as the business of buying and selling houses absorbed its worst year since the housing market was mired in the fallout from the Great Recession. This happened as the cost of buying properties continued to rise faster than gains on resale," said Todd Teta, chief product officer at ATTOM Data Solutions.

Returns in 2019 were still a healthy 40.6% but that was down from 45.8% in 2018 and from 51.4% in 2017.

Top flipping metros
Home flips as a portion of all home sales increased from 2018 to 2019 in 122 of the 190 metropolitan statistical areas analyzed in the report (64.2%).

Laredo, TX (up 103.5%); Raleigh, NC (up 59.8%); Charlotte, NC (up 44.1%); Fort Smith, AR (up 43.2%) and Columbus, GA (up 40.5%).

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