The number of homes that were “flipped” during the third quarter dropped compared with the second quarter, according to a report from ATTOM Data Solutions.
The firm’s Home Flipping Report shows that a total of 45,718 single-family home and condo sales were flips in the third quarter, representing 5.1% of all sales. That’s down from 5.6% of all sales in the previous quarter and unchanged compared with the third quarter of 2015.
In addition, the report shows that the number of entities that flipped properties during the third quarter was down 7% compared with a year earlier.
It also shows that the share of flips purchased with cash was at an eight-year low. Of the 45,718 homes flipped in the third quarter, 67.9% were purchased with cash – down from 68.2% in the previous quarter and down from 69.0% in the third quarter of 2015. It was the lowest share of cash sales for flips since the third quarter of 2008.
ATTOM Data Solutions defines a “flip” as a property that is sold in an arms-length sale for the second time within a 12-month period.
Part of the reason flips were down in the third quarter is partly because they surged to a six-year high in the second quarter.
The average profit on a flip in the third quarter decreased due, in part, to rising home prices. The average gross profit on a flip was around $60,800, down from $62,424 in the previous quarter.
For more, including which markets saw the most home flipping during the quarter, click here.