IRVINE, Calif. – Dec. 6, 2018 – ATTOM Data Solutions’ Q3 2018 U.S. Home Flipping Report finds that a total of 45,901 U.S. single family homes and condos were flipped in the third quarter of 2018 – down 12 percent year-to-year and the lowest level in 3.5 years (Q1 2015).
Of all 3Q home sales, both single-family and condo, 5 percent were flips, ATTOM reports. That’s a quarter-to-quarter drop from 5.2 percent and year-to-year drop from 5.1 percent.
“Home flipping acts as a canary in the coal mine for a cooling housing market because the high velocity of transactions provides home flippers with some of the best and most real-time data on how the market is trending,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.
Blomquist says the last time flipping dropped, in 2014, it followed a mortgage rate increase in late 2013. However, he doesn’t see it as a harbinger of doom, saying, “It’s still far from the 11 consecutive quarters with year-over-year decreases in home flips extending from Q2 2006 through Q4 2008 and leading up to the last housing crash.”
3Q overview of home flips
- Average home flipping returns dropped to a 6.5-year low. Homes flipped in Q3 2018 sold for an average of $63,000 more than what the home flipper paid for them. That’s down from an all-time high average gross flipping profit of $68,000 in the first quarter and $65,000 one year ago.
- The average flip returned an average 42.6 percent gross flipping return on investment (ROI), down from an average 44.1 percent gross flipping ROI quarter-to-quarter and 8.1 percent year-to-year.
- Flippers sold almost one in three homes for between $100,000 to $200,000 – 31.6 percent of all flipped sales. However, flipped homes that sold for more than $5 million saw the highest gross flipping ROI of any price range.
- Pennsylvania (96.7 percent), Ohio (90.4 percent), Kentucky (84.7 percent), Louisiana (82.4 percent) and Michigan (78.6 percent) had the highest gross flipping returns.
- Among 1,264 U.S. zip codes analyzed in the report with at least 10 flips during the quarter, those with the highest average gross flipping ROI in Q3 2018 were 33993 in Cape Coral, Florida (881.0 percent); 41091 in Cincinnati, Ohio (631.0 percent); 40356 in Lexington, Kentucky (421.1 percent); and 21216 (410.4 percent) and 21218 (357.1 percent), both in Baltimore, Maryland.
- Among 1,264 U.S. zip codes analyzed in the report with at least 10 flips during the quarter, those with the highest home flipping rate were 38115 in Memphis, Tennessee (28.1 percent); 33142 in Miami, Florida (27.3 percent); 11717 in Brentwood, New York (27.1 percent); 75224 in Dallas, Texas (26.8 percent); and 11436 in the county of Queens, New York (25.6 percent).
Other report takeaways
- The median year built of homes flipped in 3Q 2018 was 1978, the third consecutive quarter for the oldest median year built as far back as data is available – 1Q 2000.
- The median square footage of homes flipped in 3Q 2018 was 1,408, the smallest median square footage as far back as data is available.
- The average time to complete a home flip was 179 days, down from 185 days in the previous quarter, and down from 180 days in year-to-year.
Reprinted with permission.
2018 Florida Realtors®