Nearly 1 out of every 10 homes sold in Q1 was flipped: Report


Share post:

Home-flipping activity remained high during the first three months of the year after a sharp drop. Profits also rose slightly, according to property data firm Attom.

Theme 2ndHomes In ArticleReaders who prioritize second homes and investment properties turn to Inman’s weekly Property Portfolio email newsletter, whether they’re agents who work with this special class of clients or investors themselves. This month, we’ll go deeper on everything from the latest at Airbnb and Vrbo to the changes investors are making to their portfolios in a shifting real estate market.

Home-flipping activity rose sharply in the first three months of the year despite profits sitting near the lowest point since 2000, according to a new report.

Among all single-family homes and condos sold during the first three months of the year, 72,960 were after being renovated by an investor, according to property data firm Attom. That represented 9 percent of all sales.

That’s the second-highest share of sales in at least the past 23 years, Attom said, indicating that flipping activity has continued at a high rate despite difficult financing.


Attom CEO Rob Barber

“In the first quarter, profit margins showed a slight upward turn after an extended slump, while interest in flipped homes continued to rise among buyers,” said Attom CEO Rob Barber. “However, investors shouldn’t assume they’re out of the woods yet.”

The higher price of holding a home while conducting renovations involved in a flip means that investors face slim margins. The typical profit margin was 22 percent, which was up slightly after three straight years of decline during the COVID-19 housing market when home prices spiked.

What’s more, Barber added, “it’s possible that the recent gain is merely a temporary blip.”

The rate of home flipping hit a high point in the first quarter of last year before quickly dropping throughout the rest of 2022.

“Nevertheless, the first-quarter trends offer some hope for investors indicating that brighter times may lie ahead,” Barber said.

Gross profit, accounting only for the purchase price and resale price and not including renovations, was $56,000 for the quarter, Attom said. That’s down 20 percent from the same time a year earlier but slightly up from the fourth quarter of 2022.

“The recent profit turnaround — modest as it was — continued an unusual pattern of home-flipping fortunes running counter to the broader U.S. housing market. For the prior three years, investment returns were mostly dropping,” Attom said. “That was happening despite prices and profits for traditional sellers soaring during an extended, decade-long boom period for the overall market.”

The median investor paid $249,000 for a typical flipped home during the first quarter and sold them for $305,000.

Flippers sold at a loss in Austin (10.2 percent loss), Phoenix (2.4 percent), Ogden (0.5 percent) and Las Vegas (0.3 percent).

Email Taylor Anderson

Get Inman’s Property Portfolio Newsletter delivered right to your inbox. A weekly roundup of news that real estate investors need to stay on top, delivered every Tuesday. Click here to subscribe.

Source link

Alexandra Williams
Alexandra Williams
Alexandra Williams is a writer and editor. Angeles. She writes about politics, art, and culture for LinkDaddy News.

Recent posts

Related articles

Avison Young arranges 99-year ground lease for an estimated $21.5 million

Share0 Avison Young has arranged a 99-year long-term ground lease at 301-307 Third Avenue on behalf of Snake...

Rosewood Realty Group Brokers $36.5 Million Sale of 15-Story Hells Kitchen Mixed-Use Building

Share0 Rosewood Realty Group announced the $36.5 million sale of 159-161 West 54th Street, a 15-story, mixed-use building...

AI and cloud adoption propel data center demand to record levels for 2023

Artificial intelligence (AI) and machine learning are touching the corners of every industry in a rapidly changing...

Miller Construction Begins Work on an 80,000-Square-Foot Build-to-Suit Industrial Warehouse in Orlando

Miller Construction Company, a statewide, privately-held construction firm, has begun site work on an 80,000-square-foot warehouse for...

Local Development Corp. Votes Final Approval of $195 Million Bond Financing for Construction of New 162,626 SF Patient Care Tower at Westchester Medical Center

The Westchester County’s Local Development Corporation (LDC) voted on August 23 final approval of $195 million in...

NAI James E. Hanson Tapped to Sell 133,032-Square-Foot Retail Power Center in Riverdale, N.J.

 NAI James E. Hanson, the largest New Jersey-based full-service independent commercial real estate firm, announces it has...

Curtis + Ginsberg Architects To Relocate HQ To Rudin’s One Battery Park Plaza

 Rudin announced today that Curtis + Ginsberg Architects has signed a 12,602 square-foot lease at One Battery Park Plaza in Lower...

Camber Property Group Closes on $23 million Oakland Heights Apartments

Camber Property Group announced today the acquisition and preservation of the Oakland Heights Apartments, a 12 acre...