The 2021 U.S. Home Flipping Report by ATTOM shows that 4.9% of all home sales in the second quarter of 2021 were single-family homes and condominiums being flipped, representing the first increase in a year.
The home flipping rate rose 3.5% from the first quarter to the second quarter of 2021, but was still down 6.8% from the second quarter of 2020 and remains below levels seen throughout most of the decade.
The report reveals that even as flipping rates continue to rise, profits are dipping to a 10-year low. Nationwide, the gross profit on a typical home flip for the second quarter is, on average, $67,000, up 2.4% from $65,400 in the previous quarter and up 3.1% from $65,000 in the second quarter last year. That translates into just a 33.5% return on investment (ROI).
National gross flipping ROI for the second quarter this year (33.5%) was down from 37.2% in the first quarter of 2021, and down from 40.6% in the second quarter of last year. Still, the median price of homes flipped soared to an all-time high of $267,000 in the second quarter this year, up 10.6% from the previous quarter and up 18.7% from last year.
According to the second quarter home flipping report, the highest raw profits on median-home flips, measured in cash, are concentrated in the West, Northeast, and South. Some of the leading metros in those regions include San Jose, CA (typical gross profit of $242,500); Fargo, ND ($200,336); San Francisco, CA ($182,000); Salisbury, MD ($159,500) and Barnstable, MA ($155,500).
The 25 smallest raw profits on typical deals were spread across the southern and midwestern metros. The lowest ROIs were found in Gulfport, MS ($12,938 loss); Corpus Christi, TX ($1,800 profit); College Station, TX ($2,779 profit); Longview, TX ($14,291 profit) and Amarillo, TX ($16,514 profit).
To take an even closer look, ATTOM delves into data at the zip code level, looking at areas with a population of 20,000 or more with at least 20 flips in the second quarter of 2021. The top 10 zips with the highest raw profits were: 98033 in Kirkland, WA ($516,500); 15317 in Canonsburg, PA ($426,082); 46074 in Westfield, IN ($404,618); 19709 in Middletown, DE ($373,280); 20011 in Washington, DC ($372,500); 68022 in Elkhorn, NE ($372,500); 07871 in Sparta, NJ ($326,755); 34120 in Naples, FL ($322,500); 68046 in Papillion, NE ($308,000); and 73034 in Edmond, OK ($296,000).
Home flips as a portion of all home sales increased year-over-year in 79% of the metros analyzed for the second quarter of 2021. Still, the national rate remains below where it was throughout most the decade.
