Home flipping increasing in almost half of markets but returns slip

by Steve Randall07 Dec 2017
Almost half of US markets have shown increased home flipping but the returns are falling.

Overall, the rate of flipping slipped to 5.1% in the third quarter of 2017, down from 5.6% in the previous quarter and unchanged from Q3, 2016. But ATTOM Data Solutions says that flipping has increased in 47% of markets surveyed.

The returns from home flipping have dropped to a 2-year low with an average yield of $66,448 per flip, a return of 47.7%; compared to 47.8% in Q2 and 51.2% in Q3, 2016. It’s the lowest rate of return since Q2, 2015.

"Home flipping profits continue to be squeezed by a dwindling inventory of distressed properties available to purchase at a discount and increasing competition from fair-weather home flippers often willing to operate on thinner margins," said Daren Blomquist, senior vice president at ATTOM Data Solutions.

A total of 48,685 properties were flipped in the third quarter and the year-to-date total of 153,727 is in line with the 10-year high of the same period of 2016.

Where the flippers are
The metros where flipping remains elevated are led by Baton Rouge, Louisiana (up 140%); Winston-Salem, North Carolina (up 58%); Salem, Oregon (up 51%); Indianapolis, Indiana (up 51%); and Buffalo, New York (up 47%).

Baton Rouge also led the 33 out of 93 metros where gross ROI for flippers bucked the national trend - by rising in the third quarter of 2017 by 117%.

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