Flipping Rate Increases for Second Quarter in
a Row While Profit Rebound Continues; Investment Returns
Still Low but Reach 30 Percent Nationwide for First Time in Over a
Year; Raw Flipping Profits Also Hit High Point Since
2022
IRVINE,
Calif., June 20, 2024 /PRNewswire/ -- ATTOM, a
leading curator of land, property and real estate data, today
released its first-quarter 2024 U.S. Home Flipping Report showing
that 67,817 single-family homes and condominiums in the United States were flipped in the first
quarter. Those transactions represented 8.7 percent, or one of
every 12 home sales nationwide, during the months running from
January through March of 2024.
The latest portion was up from 7.7 percent of all home sales in
the U.S. during the fourth quarter of 2023 – the second straight
quarterly gain. While the portion was still down from 9.8 percent
in the first quarter of last year.
As flipping rates went up, fortunes kept improving for investors
who buy and quickly resell homes. The latest data showed that home
flippers typically earned a 30.2 percent gross profit nationwide
before expenses on homes sold during the first quarter of this
year, marking the third time in four quarters that margins
increased following a six-year period of mostly uninterrupted
declines.
The typical first-quarter profit margin – based on the
difference between the median purchase and median resale price for
home flips - remained about 25 percentage points below peaks hit in
2016. It also stayed withing a range that could easily be wiped out
by carrying costs that include renovation expenses, mortgage
payments and property taxes.
But it was up from both the fourth quarter of 2023 and from a
low point over the past decade of about 25 percent in the first
quarter of last year.
Gross profits on typical flips around the country, meanwhile,
increased to $72,375. That remained
down from a high of about $80,000
reached in 2022. But it was up from $65,000 in the fourth quarter of 2023 and was
about $10,000 above last year's low
point.
"The latest numbers show that investors still face an uphill
climb to clear significant profits after expenses," said
Rob Barber, CEO for ATTOM. They,
like others, also face tenuous times amid a housing market boom
that's cooled down over the past year. But we now have a year's
worth of a trend showing that things have started to turn around
for the flipping industry, with clear signs of increasing interest
flowing into the market."
The continued improvements in profits and profit margins over
the past year reflect a rejuvenated pattern of investors
benefitting from shifts in prices going in their favor between the
time of purchase to resale.
In the first quarter of 2024, the typical nationwide resale
price on flipped homes increased to $312,375, a 4.1 percent improvement over the
fourth quarter of 2023. The increase outpaced the 2.1 percent rise
in median prices that recent home flippers were commonly seeing
when they were buying their properties. Similar gaps appeared
annually as well, leading to the quarterly and yearly improvement
in investment returns.
Home flipping rates turn upward in almost 80 percent of
nation
Home flips as a portion of all home sales increased
from the fourth quarter of 2023 to the first quarter of 2024 in 134
of the 173 metropolitan statistical areas around the U.S. with
enough data to analyze (77.5 percent). Most of the declines were by
less than two percentage points. (Metro areas were included if they
had a population of 200,000 or more and at least 50 home flips in
the first quarter of 2024 and sufficient data.)
Among those metros, the largest flipping rates during the first
quarter of 2024 were in Warner Robins,
GA (flips comprised 18.7 percent of all home sales);
Macon, GA (17.1 percent);
Fayetteville, NC (15.8 percent);
Atlanta, GA (14.7 percent) and
Memphis, TN (14.6 percent).
Q1 2024 U.S. Home Flipping Historical Trends
Aside from Atlanta and
Memphis, the highest flipping
rates among metro areas with a population of more than 1 million
were in Columbus, OH (12.8
percent); Birmingham, AL (12.7
percent) and Kansas City, MO (12.1
percent).
The smallest home-flipping rates among metro areas analyzed in
the first quarter were in Honolulu,
HI (3.7 percent); Oxnard,
CA (5.3 percent); Naples,
FL (5.4 percent); Des Moines,
IA (5.5 percent) and Seattle,
WA (5.5 percent).
Typical home flipping returns rise in slightly more than half
of U.S.
The median $312,375
resale price of homes flipped nationwide in the first quarter of
2024 generated a gross profit of $72,375 above the median investor purchase price
of $240,000. That resulted in a
typical 30.2 percent profit margin in the first quarter of 2024, up
from 27.7 percent in the fourth quarter of 2023 and 25.3 percent in
the first quarter of last year. But the latest nationwide figure
still remained far beneath the 56.3 percent level in mid-2016 and
from a more recent peak of 48.8 in 2020.
Profit margins went up from the fourth quarter of last year to
the first quarter of this year in 89 of the 173 metro areas
analyzed (51.4 percent) and were up annually in 111 of those
markets, or 64.2 percent.
The biggest year-over-year increases in the typical profit
margins during the first quarter came in Reading, PA (ROI up from 56.7 percent in the
first quarter of 2023 to 124.9 percent in the first quarter of
2024); Trenton, NJ (up from 22.7
percent to 64.2 percent); Harrisburg,
PA (up from 73.6 percent to 113.6 percent); Lynchburg, VA (up from 49 percent to 87.5
percent) and Columbus, GA (up from
41.8 percent to 80.1 percent).
Markets with the largest returns on investment for typical home
flips completed during the first quarter of 2024 were concentrated
in lower-priced areas of the Northeast, led by Buffalo, NY (127.8 percent return);
Reading, PA (124.9 percent);
Pittsburgh, PA (120.6 percent);
Scranton, PA (115.7 percent) and
Harrisburg, PA (113.6
percent).
Metro areas with a population of at least 1 million and the
weakest returns on typical home flips in the first quarter of 2024
were Austin, TX (0.3 percent);
Honolulu, HI (1.7 percent);
San Antonio, TX (2 percent);
Dallas, TX (5.3 percent) and
Houston, TX (8.4 percent)
Q1 2024 Home Flipping Profit Trends Historical Chart
Investors earn highest raw profits in more expensive areas of
West, South and Northeast
The largest raw profits on
median-priced home flips in the first quarter of 2024, measured in
dollars, were concentrated in areas of the West, South and
Northeast regions where resale prices mostly topped $400,000. Fifteen of the top 20 fell into that
category, led by San Jose, CA
(typical gross profit of $297,500 on
a median resale value of $1.6
million); San Francisco, CA
($280,000 profit on a median resale
value of $1.1 million); San Diego, CA ($190,750 profit on a median resale value of
$926,500); Bridgeport, CT, ($175,000 profit on a median resale value of
$500,000 million) and Oxnard, CA ($162,000 profit on a median resale value of
$929,500).
The South also dominated the opposite end of the range, with 16
of the 20 worst raw profits on median-priced transactions during
the first quarter, although resale price ranges were mixed. The
weakest numbers were in Jackson,
MS ($3,873 loss on a median
resale value of $185,560);
Killeen, TX ($1,209 loss on a median resale value of
$208,750); Austin, TX ($1,178 profit on a median resale value of
$427,725); San Antonio, TX ($5,144 profit on a median resale value of
$258,259) and Honolulu HI ($10,092 profit on a median resale value of
$597,567).
All-cash investing by home flippers holds
steady
Nationwide, 63.8 percent of homes flipped in the
first quarter of 2024 had been purchased by investors with cash.
That was virtually the same as the 63.7 percent level in the fourth
quarter of 2023, although still down from 65.4 percent portion in
the first quarter of 2023. Meanwhile, 36.2 percent of homes flipped
in the first quarter of 2024 had been bought with financing. That
was down slightly from 36.3 percent in the prior quarter, but still
up from 34.6 percent a year earlier.
Among metropolitan areas with a population of 1 million or more
and sufficient data to analyze, those with the highest percentage
of homes flipped in the first quarter of 2024 that had been
purchased with cash were in Buffalo,
NY (82.2 percent); Detroit,
MI (77.3 percent); Cleveland,
OH (74.8 percent); Birmingham,
AL (73.1 percent) and Pittsburgh,
PA (73 percent).
Average time to flip nationwide rises but remains down from a
year ago
The average time it took from purchase to resale on
home flips increased to 164 days in the first quarter of 2024. That
was up from 156 in the fourth quarter of 2023, but still down from
178 days in the first quarter of 2023.
Q1 2024 U.S. Avg Days to Flip Historical Chart
Investor resales to FHA buyers increase
Of the 67,817
U.S. homes flipped in the first quarter of 2024, 11.2 percent were
sold to buyers using loans backed by the Federal Housing
Administration (FHA), marking the second straight quarterly
increase. The latest portion was up from 10.4 percent in the fourth
quarter of 2023 and from 10.7 percent in the first quarter of
2023.
Among metro areas with a population of 200,000 or more and at
least 50 home flips in the first quarter of 2024, those with the
highest percentages of flipped properties sold to FHA buyers —
typically first-time home purchasers — were in Scranton, PA (27.1 percent); Bakersfield, CA (26.8 percent); Visalia, CA (26.8 percent); Yuma, AZ (25.9 percent) and Flint, MI (25.8 percent).
One-third of counties have home-flipping rates of at least 10
percent
Home flips accounted for at least 10 percent of all
home sales in 284, or 31.5 percent, of the 902 counties around the
U.S. with at least 10 flips in the first quarter of 2024. That was
well above the 22.7 percent of all counties with enough data to
measure in the fourth quarter of 2023. The leaders in the first
quarter of this year were Cobb
County (Marietta), GA (23.5
percent); Hickman County, TN
(outside Nashville) (20.3
percent); Houston County
(Warner Robins), GA (20.1
percent); Clayton County, GA
(outside Atlanta) (19.6 percent)
and Douglas County, GA (outside
Atlanta) (19.5 percent).
Report methodology
ATTOM analyzed sales deed data for
this report. A single-family home or condo flip was any arms-length
transaction that occurred in the quarter where a previous
arms-length transaction on the same property had occurred within
the last 12 months. The average gross flipping profit is the
difference between the purchase price and the flipped price (not
including rehab costs and other expenses incurred, which flipping
veterans estimate typically run between 20 percent and 33 percent
of the property's after-repair value). Gross flipping return on
investment was calculated by dividing the gross flipping profit by
the original purchase price.
About ATTOM
ATTOM provides premium property
data to power products that improve transparency, innovation,
efficiency, and disruption in a data-driven economy. ATTOM
multi-sources property tax, deed, mortgage, foreclosure,
environmental risk, natural hazard, and neighborhood data for
more than 155 million U.S. residential and commercial properties
covering 99 percent of the nation's population. A rigorous data
management process involving more than 20 steps validates,
standardizes, and enhances the real estate data collected by
ATTOM, assigning each property record with a persistent, unique ID
— the ATTOM ID. The 30TB ATTOM Data Warehouse fuels innovation in
many industries including mortgage, real estate, insurance,
marketing, government and more through flexible data delivery
solutions that include ATTOM Cloud, bulk file
licenses, property data APIs, real estate market
trends, property navigator and more. Also, introducing our
newest innovative solution, making property data more readily
accessible and optimized for AI applications– AI-Ready
Solutions.
Media Contact:
Megan
Hunt
megan.hunt@attomdata.com
Data and Report
Licensing:
datareports@attomdata.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/home-flipping-activity-and-profits-both-rise-across-us-in-first-quarter-of-2024-302177315.html
SOURCE ATTOM