Fewer But More Expensive Homes Are Being Flipped

There was much less bounce in the home flipping market during the first quarter, according to the latest numbers released by ATTOM Data Solutions.

 

In the first three months of this year, 43,615 single family homes and condos were flipped with a 12-month period, down eight percent from the previous quarter and down six percent from a year ago. The first quarter marked lowest number of homes flipped since the first quarter of 2015. However, flipped homes represented 6.7 percent of all single-family home and condo sales during the quarter, up from 5.8 percent in the previous quarter and unchanged from a year ago.

 

Homes flipped in the first quarter were sold for a median price of $200,000, a gross flipping profit of $64,284 above the median purchase price of $135,716, up from a gross flipping profit of $63,500 in the previous quarter and a gross flipping profit of $59,100 in one year earlier. The first quarter’s median price is an all-time high.

 

But the $64,284 average gross flipping profit translated into an average 47.4 percent gross return on investment (ROI) for homes flipped in first quarter, down from an average 49 percent average gross flipping ROI in the previous quarter and an average 48.5 percent average gross flipping ROI one year earlier. This was the second straight quarter where the average gross flipping ROI decreased on a year-over-year basis following six consecutive quarters of year-over-year increases.

 

“The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued compared to a year ago and average home flipping returns decreased for the second consecutive quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Home flippers financed an estimated $3.5 billion in purchases for homes flipped during the quarter, up from $3.3 billion in the previous quarter and up from $2.4 billion a year ago to the highest level since the fourth quarter of 2007—a more than nine-year high.”

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