Home Flipping Increased 2% in 2019, But Average Profit Per Flip Continued to Drop

0

About 246,000 single-family homes were flipped in 2019, an increase of 2% compared with 2018 to the reach the highest point since 2006, according to ATTOM Data Solutions.

About 6.2% of all home sales in the nation were flips, according to the firm’s 2019 U.S. Home Flipping Report. That’s up from 5.8% in 2018 and 5.7% in 2017.

While flipping activity rose, profit margins continued to drop. Homes flipped in 2019 generated an average gross profit of $62,900, down 3.2% compared with $65,000 in 2018 and down 6% compared with the post-recession peak of $66,899 in 2017.

“Home-flipping profits across the U.S. dropped again in 2019 as the business of buying and selling houses absorbed its worst year since the housing market was mired in the fallout from the Great Recession,” says Todd Teta, chief product officer at ATTOM Data Solutions, in a statement. “This happened as the cost of buying properties continued to rise faster than gains on resale.

“That’s not to say that the home-flipping industry is tanking or losing its allure for investors because home flipping rates are higher than they’ve been in eight years,” Teta adds. “But profits did continue to decline again for investors.”

The typical gross flipping profit of $62,900 translated into a 40.6 percent return on investment compared to the original acquisition price.

That’s down from 45.8% in 2018 and down from 51.4% in 2017.

The latest typical return on home flips stood at the lowest point since 2011.

Leave a Comment

avatar
  Subscribe  
Notify of