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U.S. home flipping returns drop to nearly four-year low in Q2

Staff Writer | September 6, 2018
ATTOM Data Solutions released its Q2 2018 U.S. Home Flipping Report, which shows that homes flipped in the second quarter of 2018 yielded an average gross return on investment of 44.3 percent, down from 47.8 percent in the previous quarter and down from 50.0 percent in Q2 2017 to the lowest average gross flipping ROI since Q3 2014.
home flipping
America   48,768 U.S. single family homes and condos were flipped
The report shows a total of 48,768 U.S. single family homes and condos were flipped in the second quarter of 2018, a home flipping rate of 5.2 percent of all sales — down from a 6.6 percent home flipping rate in Q1 2018 and down from a 5.4 percent home flipping rate in Q2 2017.

Homes flipped in Q2 2018 sold for an average of $65,520 more than what the home flipper purchased them for, down from an all-time high average gross flipping profit of $69,500 in the first quarter and down from an average gross flipping profit of $69,000 a year ago. The average gross flipping profit in the second quarter was the lowest since Q2 2016 — a two-year low.

Of homes flipped in Q2 2018, 32.3 percent were purchased by the home flipper via a distressed sale – either in foreclosure or bank-owned, down from 35.8 percent the previous quarter and down from 38.7 percent a year ago. The peak in distressed sales purchases by home flippers was 68.2 percent in Q1 2010.

States with the highest share of Q2 2018 home flips purchased via a distressed sale were New Jersey (64.1 percent); Delaware (60.3 percent); Indiana (55.4 percent); Maryland (52.8 percent); and New York (48.4 percent).

Among 140 metropolitan statistical areas with at least 50 flips in Q2 2018 and a population of at least 200,000, those with the highest share of Q2 2018 home flips purchased via distressed sale were Atlantic City, New Jersey (71.0 percent); El Paso, Texas (70.5 percent); Trenton, New Jersey (65.2 percent); Virginia Beach, Virginia (60.7 percent); and New York, New York (56.5 percent).

Among home flips completed in Q2 2018, 38.6 percent were purchased by the home flipper with financing, up from 36.8 percent in the previous quarter but down from a nearly 10-year high of 39.6 percent in Q2 2017.

States with the highest share of flips purchased with financing were Rhode Island (63.8 percent); Colorado (57.1 percent); New Hampshire (53.4 percent); Minnesota (50.2 percent); and Washington 50.0 percent).

Among 140 metropolitan statistical areas with at least 50 flips in Q2 2018 and a population of at least 200,000, those with the highest share of flips purchased with financing were Fort Collins, Colorado (66.7 percent); Colorado Springs, Colorado (66.0 percent); Providence, Rhode Island (60.3 percent); Greeley, Colorado (59.6 percent); and Seattle, Washington (54.6 percent).

Among 1,451 U.S. zip codes analyzed in the report with at least 10 flips during the quarter, those with the highest share of flips purchased with financing were 80923 in Colorado Springs, Colorado (85.7 percent); 85006 in Phoenix, Arizona (84.6 percent); 98033 in Kirkland, Washington in the Seattle metro area (84.6 percent); 80525 in Fort Collins, Colorado (84.2 percent); and 20002 in the District of Columbia (81.8 percent).

States with the highest average gross flipping ROI in Q2 2018 were Louisiana (102.5 percent), Pennsylvania (100.3 percent), Ohio (81.4 percent), Maryland (76.1 percent), and Tennessee (74.9 percent).

Among 140 metropolitan statistical areas with at least 50 flips in Q2 2018 and a population of at least 200,000, those with the highest average gross flipping ROI in Q2 2018 were Pittsburgh, Pennsylvania (162.7 percent); Hickory-Lenoir-Morganton, North Carolina (129.0 percent); Mobile, Alabama (126.6 percent); Buffalo, New York (107.5 percent); and Baton Rouge, Louisiana (107.1 percent).

Among 1,451 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 Q2 2018 were 35211 in Birmingham, Alabama (352.4 percent); 63118 in St. Louis, Missouri (351.6 percent); 37344 in Fayetteville, Tennessee (323.7 percent); 19144 in Philadelphia, Pennsylvania (294.1 percent); and 07017 in East Orange, New Jersey (273.1 percent).

The District of Columbia had the highest home flipping rate in the nation in Q2 2018 (8.3 percent), followed by Nevada (7.4 percent), Tennessee (7.2 percent), Arizona (6.7 percent), Maryland (6.5 percent), and Alabama (6.4 percent).

Among 140 metropolitan statistical areas with at least 50 flips in Q2 2018 and a population of at least 200,000, those with the highest home flipping rate for the quarter were Memphis, Tennessee (9.7 percent); Clarksville, Tennessee (8.2 percent); Atlantic City, New Jersey (7.9 percent); York, Pennsylvania (7.7 percent); and Las Vegas, Nevada (7.7 percent).

Among 1,451 U.S. zip codes analyzed in the report with at least 10 flips during the quarter, those with the highest home flipping rate were 11950 in the Long Island city of Mastic, New York (35.3 percent); 78537 in Donna, Texas, in the McAllen metro area (32.3 percent); 11717 in the Long Island city of Brentwood, New York (28.2 percent); 35214 in Birmingham, Alabama (27.4 percent); and 38109 in Memphis, Tennessee (27.2 percent).

The average time to complete a home flip was 186 days for flips completed in Q2 2018 compared to 182 days in the previous quarter and 185 days a year ago.

States with the longest shortest average time to flip were New Hampshire (151 days); Arizona (161 days), Nevada (167 days), Alabama (168 days), and Missouri (171 days).

Among 140 metropolitan statistical areas with at least 50 flips in Q2 2018 and a population of at least 200,000, those with the shortest average time to flip were Memphis, Tennessee (137 days), Manchester-Nashua, New Hampshire (138 days), Mobile, Alabama (140 days), McAllen-Edinburg-Mission, Texas (147 days); and Vallejo-Fairfield, California (150 days).

Among 1,451 U.S. zip codes analyzed in the report (with at least 10 flips during the quarter), those with the shortest average time to flip were 73110 in Oklahoma City, Oklahoma (83 days) followed by three Atlanta-area zip codes: 30039 in Snellville, Georgia (88 days); 30294 in Ellenwood, Georgia (89 days); and 30052 in Loganville (91 days); and 93637 in Madera, California (92 days).


 

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