Nearly one of every 13 home sales (7.7%) during the second quarter of 2024 was a flipped single-family home or condominium. That's according to ATTOM's second-quarter 2024 U.S. Home Flipping Report, which showed that 79,540 single-family homes and condominiums in the United States were flipped from April to June.
The latest portion of flipped properties was down from 8.7% of all sales in the U.S. during the first quarter — something ATTOM says is a common pattern during the busy spring buying season each year when other types of home sales spike. The flipping rate also was down slightly from 7.9% a year earlier.
While the rate declined, fortunes kept ticking upward for investors who buy, renovate, and resell homes. The latest data showed that investors typically earned a 30.4% gross profit nationwide on homes sold during the second quarter of this year, marking the fourth time in five quarters that margins increased following six years of nearly continuous drop-offs.
However, the typical profit margin on homes flipped during the second quarter remained about 25 percentage points below peaks hit in 2016.
Gross profits on typical flips around the country, meanwhile, increased to about $73,500. That remained down from a high of almost $81,000 reached in 2022, but up from $70,000 in the first quarter of 2024 and more than $12,000 above last year’s low point.
“The Spring home-buying season of 2024 brought another sign of hope for home flippers that the rebound in fortunes that began for them last year was more than just a temporary thing,” said Rob Barber, CEO of ATTOM. “It’s not as if profits have shot through the roof and investors are riding a new wave of good times. Far from it, as they continue to struggle to benefit from the broader market boom. But the second-quarter numbers did show another step in the right direction.”
Flipping Rate Shimmies Downward For Most Of U.S.
Home flips as a portion of all home sales decreased from the first quarter of 2024 to the second quarter of 2024 in 159 of the 185 metropolitan statistical areas (MSAs) around the U.S. with enough data to analyze (85.9%). They went down annually in 115, or 62.2%, of those markets.
Among the metro areas analyzed, the largest flipping rates during the second quarter were all in the South, and mostly in Georgia. Warner Robins, Ga. took the lead, where flips comprised 20.7% of all home sales. It was followed by Macon, Ga. (15.4%); Atlanta, Ga. (13.4%); Columbus, Ga. (13.2%); and, Memphis, Tenn. (12.8%).
On the opposite end of the spectrum, the smallest home-flipping rates were in Hilo, Hawaii (3.3%); Honolulu, Hawaii (3.5%); Seattle, Wash. (4%); San Jose, Calif. (4.1%); and, Portland, Ore. (4.2%).
Home-flipping Returns Up Year-Over-Year
The median $315,000 resale price of homes flipped nationwide in the second quarter generated a gross profit of $73,492 above the median investor purchase price of $241,508, representing a typical 30.4% gross profit margin (before expenses). That's up about one point from 29.2% in the first quarter and up from 27.8% in the second quarter of 2023.
The latest nationwide figure still remained far beneath the 56.3% level recorded in mid-2016 and from a more recent peak of 48.8% in 2020.
Profit margins increased from the first to the second quarter of this year in 93 of the 185 metro areas analyzed (50.3%) and were up annually in 107 of those markets (57.8%).
Metro areas with the biggest year-over-year increases in typical profit margins during the second quarter were Akron, Ohio, which rose from 30.9% to 78.1%); Cape Coral-Fort Myers, Fla., which rose from 13.8% to 56.4%; and, Springfield, Ill., which rose from 34.5% to 75%.
The largest raw profits on median-priced home flips in the second quarter of 2024, measured in dollars, were concentrated in areas of the West, South, and Northeast regions where resale prices mostly topped $400,000. Nine of the top-10 markets fell into that category, led by San Jose, Calif., where the typical gross profit was $350,000 on a median resale value of $1.7 million; San Diego, Calif., boasting $211,000 of profit on a median resale value of $925,000; and, Hilo, Hawaii, which saw $191,650 of profit on a median resale value of $521,400.
Cash Remains King
Nationwide, 63% of homes flipped in the second quarter of 2024 had been purchased by investors with cash only, virtually the same as the 62.6% level recorded in the previous quarter. The second quarter's figure was up from the 60.4% portion of all-cash buyers in the second quarter of 2023.
Thirty-seven percent (37%) of homes flipped in the second quarter of 2024 had been bought with financing, down slightly from 37.4% in the prior quarter, but still up from 39.6% a year earlier.
