U.S. House Flipping Rate Jumps to Nine-Year High

Written By Kristina Kennedy-Aguero | June 24, 2019 | Published in Real Estate Market Trends
2019%2f06%2f19%2f21%2f11%2f47%2f621cd43e ab0a 4194 b796 b7c2048d67ea%2fhouse%20flipping

The U.S. home flipping rate has increased significantly after being stuck at record low levels for the past three years and is now at its highest rate since 2010. ATTOM Data Solutions' recent figures show that the home flipping rate, expressed as a percentage of total sales, rose sharply to over 7 percent during the first quarter of 2019, a significant increase of over two percent from the previous quarter. Flipped homes with financing hit a 12-year high, with a total dollar volume of $6.4 billion. This is a 35 percent spike compared to the $4.7 billion recorded for the first quarter of 2018, and is also the highest level since the second quarter of 2007.

The report shows that over 49,000 single family homes and condos in the U.S. were flipped during this year’s first quarter. These homes, which represented 7.2 percent of the total home sales during this quarter, showed an increase of 5.8 percent from the previous quarter, and a jump of 6.7 percent from the previous year. Of these homes, 14.2 percent of the flipped property buyers purchased their homes using a loan backed by the Federal Housing Administration. This figure is 31.2 percent up from the last quarter of 2018 but shows a decrease of 15.2 percent from the previous year.

According to the U.S. Commerce Department, home sales decreased 6.9 percent, continuing to drop with the number of new homes sold last month. The median price of flipped homes during the first quarter of 2019 was $215,000 with an average gross profit of $60,000, compared to $62,000 in the quarter before and $68,000 in Q1 of 2018. This is the lowest figure for average gross flipping profit since the first quarter of 2016.

The report analyzed 138 metropolitan areas around the country, and home flips made up more than 30 percent of the total home sales in 8 ZIP codes during the first quarter of 2019. A 35.7 percent, Queens, New York’s 11433 ZIP code saw one of the highest home flipping rates in the country. The average time for homes to be completely flipped during this quarter was 180 days, up 5 days from the last quarter of 2018 but down from the 182 days recorded during the same time last year.

ATTOM’s Chief Product Officer Todd Teta stated that “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 percent from last year. Therefore, if investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more.”

Blog Archive

 

This information is not verified for authenticity or accuracy and is not guaranteed and may not reflect all real estate activity in the market. © 2020 REBNY Listing Service, Inc. All rights reserved. RLS IDX Data display by Elegran LLC. IDX information is provided exclusively for consumers’ personal, non- commercial use and that it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.

Elegran LLC may or may not be the exclusive listing agent of the properties being displayed on Elegran.com. All data displayed on Elegran.com is presented for informational purposes only and should be independently confirmed by all customers. All Information is compiled from both public and private sources including, but not limited to the RLS, MLS and ACRIS; each of which is assumed to be reliable. All information displayed is subject to errors and omissions regarding apartment specifications and final sale prices, and further, any unit listed may have had its listing withdrawn without notice subsequent to such information being compiled. No representation is made as to the accuracy of any description (ie: listing, close sale data, and/or building description) of any building or individual unit. All measurements and square footage are approximate and all information herein should be confirmed by customer and/or their attorney. Elegran LLC, its members, affiliates, and contributors adhere to New Your City, New York State, and United States Fair Housing Laws.