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Home Flipping Remains Up In 2022 Across U.S. But Gross Profits Fall To Another Low

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Number of Home Flips Hits Highest Level in More Than 15 Years;
But Investment Returns on Flips Sink to Lowest Point Since 2008;
Two-Thirds of Flipped Homes Purchased with Cash

Irvine, CA – March 23, 2023 (PRNewswire) ATTOM, a leading curator of land, property, and real estate data, today released its year-end 2022 U.S. Home Flipping Report, which shows that 407,417 single-family homes and condos in the United States were flipped in 2022. That was up 14 percent from 357,666 in 2021, and up 58 percent from 2020, to the highest point since at least 2005.

The report reveals that the number of homes flipped by investors last year represented 8.4 percent of all home sales, also the largest figure since at least 2005. The latest portion was up from 5.9 percent in 2021 and 5.8 percent in 2020.

But even as quick buy-renovate-and-resell turnarounds by investors shot up, gross profit margins on home flips in 2022 sank to their lowest level since 2008 following the second major drop in two years.

Homes flipped in 2022 typically generated a gross profit of $67,900 nationwide (the difference between the median sales price and the median amount originally paid by investors). That was down 3 percent from $70,000 in 2021 and translated into just a 26.9 percent return on investment compared to the original acquisition price. The latest nationwide ROI (before accounting for mortgage interest, property taxes, renovation expenses and other holding costs) was down from 32.6 percent in 2021 and from 41.9 percent in 2020.

U.S. Home Flipping Gross Profits & Returns Chart

Investors saw their profit margins drop for the fifth time in the past six years as the median value of the homes they flipped rose more slowly than the median price they paid to purchase properties – 12 percent versus 17 percent.

The decline in home-flipping profits in 2022 continued to cast a negative light on a niche of the U.S. housing market that is growing but also struggling to figure out how to profit from changing price trends.

The latest drop-off came during a year when the nation’s decade-long home-price runup began to stall, leading to the weakest annual gains in three years and even a decline in the second half of 2022. That happened as rising home-mortgage rates, consumer price inflation and other forces cut into what home seekers could afford, reducing demand and cutting into prices investors were able to get on resale. But profits for home flippers had begun diminishing in 2017 even as the broader housing market was booming.

“Last Year, home flippers throughout the U.S. experienced another tough period as returns took yet another hit. For the second straight year, more investors were flipping but found no simple path to quick profits,” said Rob Barber, chief executive officer at ATTOM. “Indeed, returns are now at the point where they could easily be wiped out by the carrying costs during the renovation and repair process, which usually accounts for 20 to 33 percent of the resale price. This year will reveal more about whether investors decide to find different ways to profit from home-flipping or take a step back and wait for conditions to get better.”

Home flipping rates up in almost all housing markets, with biggest increases in South and West
Home flips as a portion of all home sales increased from 2021 to 2022 in 216 of the 218 metropolitan statistical areas analyzed in the report (99 percent). Among the 25 largest increases in annual flipping rates, 20 were in the South and West. They were led by Burlington, VT (rate up 283.7 percent); Prescott, AZ (up 183.1 percent); Bremerton, WA (up 182.7 percent); Jackson, MS (up 176 percent) and Honolulu, HI (up 172.6 percent). Metro areas qualified for the report if they had a population of at least 200,000 and at least 100 home flips in 2022.

Aside from Honolulu, the biggest increases in flipping rates in 2022 in metro areas with a population of 1 million or more were in Sacramento, CA (rate up 116.4 percent); Atlanta, GA (up 94.3 percent); Minneapolis, MN (up 72.8 percent) and Orlando, FL (up 72.2 percent).

The only metro areas where home flipping rates decreased from 2021 to 2022 were New Orleans, LA (rate down 8.2 percent) and Green Bay WI (down 2.9 percent).

Home flips purchased with cash financing decrease again while all-cash transactions go up
Nationally, the percentage of flipped homes purchased with financing decreased in 2022 to 35.2 percent, down from 35.9 percent in 2021 and from 41 percent in 2020.

U.S. Home Flipping Financing Trends Chart

Meanwhile, 64.8 percent of homes flipped in 2022 were bought with all-cash, up from 64.1 percent in 2021 and from 59 percent two years earlier.

Among metropolitan areas with a population of 1 million or more and sufficient data to analyze, those with the highest percentage of flipped homes purchased by investors with financing in 2022, included Boston, MA (53.7 percent); San Diego, CA (51 percent); Seattle, WA (50.8 percent); Providence, RI (50.5 percent) and San Jose, CA (50.1 percent).

In that same group, the metro areas with the highest percentage of flips purchased with all cash included Detroit, MI (84.7 percent); Atlanta, GA (80.7 percent); Buffalo, NY (80.6 percent); Indianapolis, IN (77.4 percent) and Cleveland, OH (77.1 percent).

Typical gross profits on home flips decline in half the nation
Homes flipped in 2022 were sold for a median price nationwide of $320,000, generating a gross flipping profit of $67,900 above the median original purchase price paid by investors of $252,100. That national gross-profit figure was down from $70,000 in 2021 (the high point since at least 2005) but still up from $67,000 in 2020.

2022 Gross Flipping ROI by Price Range Chart

Among the 56 metro areas in the U.S. with a population of 1 million or more, those with the largest gross flipping profits in 2022 were San Jose, CA ($242,625); San Francisco, CA ($163,000); Washington, DC ($146,728); New York, NY (141,332) and Seattle, WA ($137,664).

The lowest gross flipping profits among metro areas with a population of at least 1 million in 2022 were in Kansas City, MO ($26,963); San Antonio, TX ($29,000); Houston, TX ($29,901); Indianapolis, IN ($34,532) and Dallas, TX ($36,970).

Home flipping returns drop in three-quarters of U.S., hitting lowest nationwide level in over 15 years
The gross profit margin on the typical home flip in the U.S. last year fell to 26.9 percent – the smallest investment return since at least 2005. The ROI on median-priced home flips nationwide has dropped 15 percentage points since 2020 and is off by 24 points since 2016.

Margins fell last year as the median nationwide resale price on flipped homes increased just 12.3 percent, from $285,000 in 2021 to $320,000 in 2022. That was less than the 17.3 percent increase in the price investors were paying when they bought homes (from $215,000 to $252,100).

The typical home-flipping investment return decreased from 2021 to 2022 in 168, or 77 percent, of the 218 metro areas analyzed.

Among metro areas with a population of 1 million or more, the biggest percentage-point decreases in profit margins during 2022 were in Rochester, NY (ROI down from 100.4 percent in 2021 to 55.6 percent in 2022); Oklahoma City, OK (down from 63.6 percent to 35.1 percent); Philadelphia, PA (down from 106.3 percent to 78 percent); Richmond, VA (down from 91.4 percent to 68.6 percent) and Washington, D.C. (down from 61 percent to 42.7 percent).

In that same group of markets with populations of at least 1 million, the largest increases in returns on investment on the typical home flips were in Cleveland, OH (ROI up from 26.8 percent in 2021 to 41.4 percent in 2022); New Orleans, LA (up from 54.1 percent to 64.6 percent); Cincinnati, OH (up from 38.4 percent to 47.4 percent); Honolulu, HI (up from 5.7 percent to 7.4 percent) and Orlando, FL (up from 17.6 percent to 18.7 percent).

Among metro areas with a population of at least 1 million, the biggest gross profit margins in 2022 were in Pittsburgh, PA (114.2 percent); Buffalo, NY (90.7 percent); Philadelphia, PA (78 percent); Baltimore, MD (72.9 percent) and Richmond, VA (68.6 percent). The smallest were in Honolulu, HI (7.4 percent); Austin, TX (8.2 percent); Sacramento, CA (9.4 percent); Phoenix, AZ (10.6 percent) and Houston, TX (11.3 percent).

Average days to flip nationwide increases
Home flippers who sold homes in 2022 took an average of 164 days, or about 5 ½ months, to complete the flips. That was up from 152 days for homes flipped in 2021 but still down from 182 days in 2020.

Average Days to Flip By Year Chart

Percent of flipped homes sold to FHA buyers ticks back up
Of the 407,417 U.S. homes flipped in 2022, just 8.4 percent were sold to buyers using a loan backed by the Federal Housing Administration (FHA). That was up slightly from 8 percent in 2021 but remained down 13.9 percent in 2020. It was less than one-third of the 27.4 percent sold to FHA buyers in 2010.

Among the 218 metro areas with a population of at least 200,000 and at least 100 home flips in 2022, those with the highest percentage of flipped homes sold in 2022 to FHA buyers — typically first-time homebuyers — were Merced, CA (25.6 percent); Visalia, CA (24.6 percent); Springfield, MA (22.2 percent); Laredo, TX (21.9 percent) and Modesto, CA (20.6 percent).

More than 200 counties had a home flipping rate of at least 10 percent in 2022
Among 955 counties with at least 50 home flips in 2022, there were 219 counties where flips accounted for at least 10 percent of all home sales last year. The top five were all in Georgia: Douglas County, GA (outside Atlanta) (19.5 percent); Lumpkin County, GA (north of Atlanta) (19.2 percent); Clayton County, GA (outside Atlanta) (18.6 percent); Paulding County, GA (outside Marietta) (18.5 percent) and Rockdale County, GA (outside Atlanta) (18 percent).

“While declining margin is certainly a cause for caution, it is important to remember that these numbers are somewhat backward looking in that they reflect dispositions of properties that were acquired in 2021 or early 2022 amidst the Covid-induced bidding wars in many locales”, said Maksim Stavinsky, Co-Founder and President of Roc360. “On the other hand, it is encouraging that investors were able to clear in excess of four hundred thousand properties – the most ever – in an environment of rising interest rates, without a meaningful increase in project timelines.” Roc360 last week announced the closing of its asset acquisition of Finance of America Commercial, a business purpose loan originator, so it is continuing to bet on growth in the space.

High-level takeaways from fourth-quarter 2022 data:

  • The 80,335 home flips in the fourth quarter of 2022 which represented a flipping rate of 8.4 percent.
  • The share of homes flipped in the fourth quarter of 2022 that were purchased by investors with financing represented 33.5 percent of all homes flipped in the quarter, down from 36.3 percent in the previous quarter and from 34.3 percent in the fourth quarter of 2021. The share purchased with cash rose to 66.5 percent, up from 63.7 percent in the third quarter of 2022 and 65.7 percent in the fourth quarter of 2021.
  • The gross-flipping profit on median-priced home flips in the fourth quarter of 2022 was $50,000, the smallest amount since the first quarter of 2013. The latest figure represented a typical 20 percent return on investment (percentage of original purchase price). That was down from 24.9 percent in the previous quarter and from 27.3 percent in the same period of 2021, to the lowest point since the first quarter of 2009.
  • The quarterly decrease in the ROI was the eighth in the last nine quarters.
  • Home flips completed in the fourth quarter of 2022 took an average of 165 days, up from 153 days in the fourth quarter of 2021.

Report methodology
ATTOM analyzed sales deed data for this report. A single-family home or condo flip was any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months. The average gross flipping profit is the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping veterans estimate typically run between 20 percent and 33 percent of a property’s after-repair value). Gross flipping return on investment was calculated by dividing the gross flipping profit by the first sale (purchase) price.

About ATTOM
ATTOM provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes, and enhances the real estate data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 30TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, property navigator and more. Also, introducing our newest innovative solution, that offers immediate access and streamlines data management – ATTOM Cloud.

Media Contact:
Christine Stricker
949.748.8428
christine.stricker@attomdata.com 

Data and Report Licensing:
949.502.8313
datareports@attomdata.com

SOURCE ATTOM

U.S. Home Flips Down 12 Percent In Q3 2018 To 3.5-Year Low

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Average Home Flipping Returns Drop to 6.5-Year Low; Share of Flips Sold to FHA Buyers at a More Than 10-Year Low; Share of Home Flips Purchased with Financing Decreases From 10-Year High in Q2 2018

Irvine, CA – Dec. 6, 2018 (PRNewswire) ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q3 2018 U.S. Home Flipping Report, which shows that a total of 45,901 U.S. single family homes and condos were flipped in the third quarter of 2018, down 12 percent from a year ago to the lowest level since Q1 2015 — a 3.5-year low.

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Homes flipped in Q3 2018 represented 5.0 percent of all single family home and condo sales during the quarter — down from a 5.2 percent home flipping rate in Q2 2018 and down from a 5.1 percent home flipping rate in Q3 2017 to the lowest level since Q3 2016.

“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,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “We’ve now seen three consecutive quarters with year-over-year decreases in home flips. The last time that happened was in 2014 following the mortgage rate jump in the second half of 2013, but 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.”

Average home flipping returns drop to 6.5-year low
Homes flipped in Q3 2018 sold for an average of $63,000 more than what the home flipper purchased them for, down from an all-time high average gross flipping profit of $68,000 in the first quarter and down from an average gross flipping profit of $65,000 a year ago to the lowest level since Q2 2016.

The average gross flipping profit of $63,000 in Q3 2018 represented an average 42.6 percent gross flipping return on investment, down from an average 44.1 percent gross flipping ROI in the previous quarter and down from an average 48.1 percent gross flipping ROI in Q3 2017 to the lowest level since Q1 2012 — a 6.5-year low.

Nearly one-third of home flips sold for $100,000 to $200,000
The share of homes flipped that were sold by the home flipper between $100,000 to $200,000 made up 31.6 percent of all flipped sales, while those flip sales that occurred on homes sold for more than $5 million saw the highest gross flipping return on investment (ROI) of any price range.

Chart

Highest gross flipping returns in Pennsylvania, Ohio and Kentucky
States with the highest average gross flipping ROI in Q3 2018 were Pennsylvania (96.7 percent), Ohio (90.4 percent), Kentucky (84.7 percent), Louisiana (82.4 percent), and Michigan (78.6 percent).

Among 133 metropolitan statistical areas with at least 50 flips in Q3 2018 and a population of at least 200,000, those with the highest average gross flipping ROI in Q3 2018 were Pittsburgh, Pennsylvania (136.7 percent); Cleveland, Ohio (120.2 percent); Atlantic City, New Jersey (110.3 percent); Scranton, Pennsylvania (109.0 percent); and Philadelphia, Pennsylvania (107.9 percent).

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.

Highest home flipping rates in Arizona, Tennessee and Nevada
Arizona had the highest home flipping rate among all states in Q3 2018 (7.7 percent), followed by Tennessee (7.5 percent), Nevada (7.2 percent), Alabama (6.6 percent), and Maryland (6.0 percent).

Among 133 metropolitan statistical areas with at least 50 flips in Q3 2018 and a population of at least 200,000, those with the highest home flipping rate for the quarter were Memphis, Tennessee (10.4 percent); Atlantic City, New Jersey (9.1 percent); Phoenix, Arizona (8.6 percent); Las Vegas, Nevada (7.8 percent) and Huntsville, Alabama (7.5 percent).

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).

Share of flipped homes purchased with financing dips slightly
Homes flipped in Q3 2018 that were originally purchased with financing by the home flipper represented 38.8 percent of all homes flipped during the quarter, down from 40.7 percent in the previous quarter and down from 39.2 percent a year ago.

States where the percent of flips that were purchased with financing in the third quarter of 2018 that were well above the national average of 38.8 percent included; the District of Columbia (67.2 percent), Colorado (55.7 percent), Minnesota (52.1 percent), New Hampshire (52.0 percent) and Rhode Island (49.2 percent).

Among 133 metropolitan statistical areas with at least 50 flips in Q3 2018 and a population of at least 200,000, those with the highest percent of home flip sales purchased with financing in Q3 2018 were Madison, Wisconsin (62.5 percent); Colorado Springs, Colorado (62.2 percent); Cedar Rapids, Iowa (60.4 percent) Manchester, New Hampshire (57.6 percent) and Greeley, Colorado (56.9 percent).

Share of flips sold to FHA buyers at a 10-year low
Of the homes flipped in Q3 2018, 12.7 percent were sold to buyers using loans backed by the Federal Housing Administration (FHA) — likely first-time homebuyers — down from 16.1 percent in Q3 2017 to a 10-year low.

Among 53 metro areas analyzed in the report with at least 1 million people, those with the smallest share of completed flips sold to FHA buyers in Q3 2018 were San Jose, California (1.5 percent); Raleigh, North Carolina (3.8 percent); Las Vegas, Nevada (5.1 percent); San Francisco, California (5.7 percent); and Memphis, Tennessee (5.8 percent).

Among the 53 metro areas analyzed in the report with at least 1 million people, those with the highest share of completed flips sold to FHA buyers in Q3 2018 were Riverside, California (24.3 percent); Baltimore, Maryland (23.0 percent); Chicago, Illinois (21.1 percent); Philadelphia, Pennsylvania (20.5 percent); and San Antonio, Texas (20.2 percent).

Other high-level report takeaways

  • The median year built of homes flipped in Q3 2018 was 1978, the third consecutive quarter for the oldest median year built as far back as data is available — Q1 2000.
  • The median square footage of homes flipped in Q3 2018 was 1,408, the smallest median square footage as far back as data is available — Q1 2000.
  • A total of 37,905 entities flipped properties in Q3 2018, a ratio of 1.21 flips per entity, the lowest ratio of flips per entity since Q4 2007 — a nearly 11-year low.
  • 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 Q3 2017.

Report methodology
ATTOM Data Solutions analyzed sales deed data for this report. A single-family home or condo flip was any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months. The average gross flipping profit is the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping veterans estimate typically run between 20 percent and 33 percent of the property’s after repair value). Gross flipping return on investment was calculated by dividing the gross flipping profit by the first sale (purchase) price.

About ATTOM Data Solutions
ATTOM Data Solutions provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes and enhances the data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 9TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, APIs, market trends, marketing lists, match & append and more.

Media Contact:

Christine Stricker
(949) 748-8428
christine.stricker@attomdata.com

Data and Report Licensing:
(949) 502-8313
datareports@attomdata.com



U.S. Home Flipping Rate Matches Six-Year High In Q1 2018 Despite 3 Percent Year-Over-Year Decrease In Number Of Homes Flipped

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Average Flipping ROI Near Three-Year Low Despite All-Time High in Gross Flipping Profit; Share of Home Flips Purchased With Financing Increases to 9.5-Year High; Share of Flipped Homes Sold to FHA Buyers Drops to 10-Year Low

Irvine, CA – June 7, 2018 (PRNewswire) ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q1 2018 U.S. Home Flipping Report, which shows that 48,457 U.S. single family homes and condos were flipped in the first quarter of 2018, down 4 percent from the previous quarter and down 3 percent from a year ago to a two-year low.

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The 48,457 homes flipped in the first quarter represented 6.9 percent of all home sales during the quarter, up from 5.9 percent in the previous quarter and unchanged from a year ago — matching the highest home flipping rate since Q1 2012.

Homes flipped in Q1 2018 sold at an average gross profit of $69,500, up from an average gross flipping profit of $68,250 in the previous quarter and up from $66,287 in Q1 2017 to the highest average gross flipping profit since ATTOM began tracking in Q1 2000.

The average gross flipping profit of $69,500 in Q1 2018 translated into an average 47.8 percent return on investment compared to the original acquisition price, down from a 48.9 percent average gross flipping ROI in Q4 2017 and down from an average gross flipping ROI of 50.3 percent in Q1 2017 to the lowest level since Q2 2015 — a nearly three-year low.

“The 2018 housing market is a double-edged sword for home flippers,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Rapidly rising home prices boosted by low available inventory of homes for sale or for rent are padding profits at the back end when flippers sell, but those same market realities are eroding flipping returns at the front end by forcing flippers to pay more to acquire homes to flip.”

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Home flipping rate down from year ago in 55 percent of local markets
Seventy-five of 136 metropolitan statistical analyzed in the report (55 percent) posted a year-over-year decrease in their home flipping rate in Q1 2018, including Miami, Florida (down 16 percent), Los Angeles, California (down 3 percent), Tampa-St. Petersburg, Florida (down 13 percent); Washington, D.C. (down 6 percent); and Las Vegas (down 2 percent).

“The market is incredibly hot right now, making it very hard to find homes to flip — but there is an opportunity for flippers to move into the new construction market,” said Alex Sifakis, president of JWB Real Estate Capital, a real estate investment company based in Jacksonville, Florida, where the home flipping rate decreased 7 percent compared to a year ago in Q1 2018. “We will flip about 200 homes this year, but build about 400 new homes — the vast majority of those not in subdivisions but in older neighborhoods where we are buying teardowns or long-vacant lots.”

Home flipping rate up in Phoenix, New York, Atlanta, Philadelphia, Chicago, Dallas, Detroit
Sixty-one of the 136 metro areas analyzed in the report (45 percent) posted a year-over-year increase in their home flipping rate in Q1 2018, led by Baton Rouge, Louisiana (up 70 percent); Lincoln, Nebraska (up 62 percent); Madison, Wisconsin (up 55 percent); Columbia, South Carolina (up 48 percent); and Atlantic City, New Jersey (up 43 percent).

Among markets with at least 1,000 home flips in the first quarter, those posting a year-over-year increase in their home flipping rate in Q1 2018 were Phoenix, Arizona (up 15 percent); New York, New York (up 20 percent); Atlanta, Georgia (up 4 percent); Philadelphia, Pennsylvania (up 6 percent); Chicago, Illinois (up 7 percent); Dallas-Fort Worth, Texas (up 2 percent); and Detroit, Michigan (up 17 percent).

“The lack of houses for sale is probably why the rate is steady over last year even though demand for houses by other investors has never been higher,” said David Hicks, CEO of Homevestors, a real estate investment company with more than 900 local franchises across the country. Hicks added that more than half of homes purchased by Homevestors franchises are now flipped, compared to about one-third historically. “Our franchises have actually bought 33 percent more houses year-to-date over 2017. Sales are up 32 percent, so we are on track to have a banner year.”

Memphis leads nation with home flipping rate of 15.1 percent
Among 136 metropolitan statistical areas with at least 50 home flips in Q1 2018, those with the highest home flipping rate were Memphis, Tennessee (15.1 percent); Albany, Oregon (11.7 percent); East Stroudsburg, Pennsylvania (11.4 percent); York, Pennsylvania (10.4 percent); and Merced, California (10.3 percent).

Along with Memphis, other metro areas with a population of at least 1 million and a home flipping rate above 9.0 percent were Phoenix (10.3 percent); Virginia Beach (9.9 percent); Las Vegas (9.8 percent); Baltimore (9.7 percent); and Rochester, New York (9.5 percent).

Five zip codes with a home flipping rate of more than 30 percent
Among 1,429 U.S. zip codes with at least 10 home flips in Q1 2018, there were five zip codes where home flips accounted for more than 30 percent of all home sales: 70814 in Baton Rouge, Louisiana (39.0 percent); 19055 in Levittown, Pennsylvania (34.9 percent); 90047 in Los Angeles, California (31.7 percent); and the two Memphis Tennessee zips of 38115 (31.6 percent) and 38141 (30.3 percent).

“I am seeing a lot of new investors around investors’ meetings while more seasoned investors have been holding back and are being more cautious — some invest out of state and some move into different asset classes other than residential,” said Lin He, owner of Rellion, a real estate investment company based in Orange County, California. “On the other hand, the uncertainty over the presidential election is over and generally speaking the ‘animal spirit’ is back. My market posture is to engage the market cautiously. It doesn’t feel like a bubble yet, but the sky-high property values are definitely concerning.”

Highest flipping ROI in Pennsylvania and New Jersey markets
Among the 136 metropolitan statistical areas analyzed in the report with at least 50 home flips completed in Q1 2018, those with the highest average gross flipping ROI were East Stroudsburg, Pennsylvania (164.1 percent); Pittsburgh, Pennsylvania (146.6 percent); Atlantic City, New Jersey (133.3 percent); Reading, Pennsylvania (120.8 percent); and Philadelphia, Pennsylvania (110.2 percent).

Along with Pittsburgh and Philadelphia, metro areas with a population of at least 1 million and an average gross flipping ROI of at least 89 percent were Cleveland, Ohio (109.5 percent); Baltimore, Maryland (102.9 percent); New Orleans, Louisiana (98.8 percent); Buffalo, New York (96.4 percent); and Memphis, Tennessee (89.1 percent).

Share of flipped homes purchased with financing rises to more than nine-year high
Homes flipped in Q1 2018 that were originally purchased with financing by the home flipper represented 35.7 percent of all homes flipped during the quarter, up from 35.3 percent in the previous quarter and up from 33.5 percent a year ago to the highest level since Q3 2008 — a nine and a half year high.

“We field multiple phone calls every week from institutional investors who want to work with us,” said Matt Humphrey, co-founder and CEO of LendingHome, a fix-and-flip lender. “Wall Street has become more comfortable with the fix-and-flip space because they now have access to four years of performance data, and they’ve actively watched the development of this asset class. Large-scale, low-cost financing coupled with efficient tech-driven operations — like ours at LendingHome — means lower fees to borrowers with terms that work for them. There are simply more opportunities to get in the game. Flipping is no longer relegated to the lucky ones who have relationships with hard money lenders across town.”

Among the 136 metro areas analyzed in the report, those with the highest share of home flips purchased with financing were Colorado Springs, Colorado (63.9 percent); Madison, Wisconsin (63.0 percent); Boston, Massachusetts (56.3 percent); Greeley, Colorado (56.3 percent); and Denver, Colorado (56.1 percent).

Total estimated dollar volume of financing for homes flipped in Q1 2018 was $3.8 billion, down from $3.9 billion in the previous quarter and down from $4.0 billion in Q1 2017.

Five zip codes with an average gross flipping profit above $325,000 per flip
Among 1,429 U.S. zip codes with at least 10 home flips in Q1 2018, there were five where the average gross flipping profit was more than $325,000 per flip: 91356 in Tarzana, California ($425,000); 07307 in Jersey City, New Jersey ($385,000); 90066 in Los Angeles, California ($359,000); 95124 in San Jose, California ($350,000); and 20011 in the District of Columbia ($327,000).

“The D.C. metro area has been a hot spot for home flipping for several years now, and the first quarter of 2018 reflects that,” said Bobby Montagne, CEO of Walnut Street Finance, a fix-and-flip lender based in Fairfax, Virginia. “The area’s high density of homes, stable job market, and strong local economy make fix-and-flip projects especially attractive and sound investments in the D.C. metro area.”

Average time to flip nationwide at 183 days
Homes flipped in Q1 2018 took an average of 183 days to complete the flip, up from an average 179 days for homes flipped in Q4 2017 and unchanged from a year ago.

Among the 136 metro areas analyzed in the report, those with the shortest average days to flip were Mobile, Alabama (117 days); Memphis, Tennessee (139 days); Clarksville, Tennessee (148 days); Phoenix, Arizona (151 days); and Medford, Oregon (152 days).

Metro areas with the longest average days to flip were Provo, Utah (224 days); Naples, Florida (220 days); Salt Lake City, Utah (216 days); Ogden, Utah (216 days); and Boise City, Idaho (214 days).

Five zip codes with an average time to flip under 100 days
Among 1,429 U.S. zip codes with at least 10 home flips in Q1 2018, there were five zips where the average time to flip was less than 100 days: 38141 in Memphis, Tennessee (93 days); 76119 in Fort Worth, Texas (93 days); 85388 in Surprise, Arizona (94 days); 85043 in Phoenix, Arizona (98 days); and 32206 in Jacksonville, Florida (99 days).

“Home flippers have to adapt to the changing market if they want to find inventory,” said Sifakis of Jacksonville-based JWB Real Estate Capital. “In 2017 JWB bought a little over 700 properties, and less than 20 percent came from the MLS (Multiple Listing Service). The rest we had to source ourselves through online marketing, mailers, signage, various local and online auctions, wholesalers, etc. Four years ago, our monthly budget to find homes to flip was $0. Today it is $20,000 a month — and climbing.”

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Flipped homes sold to FHA buyers drops to 10-year low
Of the 48,457 U.S. homes flipped in Q1 2018, 15.9 percent were sold by the flipper to a buyer using a loan backed by the Federal Housing Administration (FHA), down from 16.1 percent in the previous quarter and down from 19.2 percent a year ago to the lowest level since Q1 2008.

Among the 136 metro areas analyzed in the report, those with the highest percentage of Q1 2018 home flips sold to FHA buyers — typically first-time homebuyers — were Pueblo, Colorado (32.7 percent); Merced, California (32.7 percent); Ogden, Utah (30.2 percent); Tulsa, Oklahoma (28.8 percent); and Bakersfield, California (28.6 percent).

Report methodology
ATTOM Data Solutions analyzed sales deed data for this report. A single family home or condo flip was any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months. The average gross flipping profit is the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping veterans estimate typically run between 20 percent and 33 percent of the property’s after repair value). Gross flipping return on investment was calculated by dividing the gross flipping profit by the first sale (purchase) price.

About ATTOM Data Solutions
ATTOM Data Solutions provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes and enhances the data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 9TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, APIs, market trends, marketing lists, match & append and more.

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