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 the first quarter of 2015, according to the ATTOM Data Solutions Q3 2018 U.S. Home Flipping Report.
ATTOM said the homes flipped during the third quarter represented 5 percent of all single family home and condo sales — down from 5.2 percent in the second quarter and down from 5.1 percent one year ago.
“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,” ATTOM Data Solutions Senior Vice President Daren Blomquist said in a release. “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,” Blomquist added.
According to the report, homes flipped in the quarter sold for an average of $63,000 more than what they were purchased 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.
The average gross flipping profit of $63,000 during the quarter represented an average 42.6 percent gross flipping return on investment (ROI), 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 one year ago.
The report identified the states with the highest average gross flipping ROI in the quarter as Pennsylvania (96.7 percent); Ohio (90.4 percent); Kentucky (84.7 percent); Louisiana (82.4 percent); and Michigan (78.6 percent).
The cities with highest average gross flipping ROI in the quarter were Pittsburgh (136.7 percent); Cleveland (120.2 percent); Atlantic City (110.3 percent); Scranton, Pa. (109.0 percent); and Philadelphia (107.9 percent), the report said.
The report said the average time to complete a home flip in the quarter was 179 days, down from 185 days in the previous quarter, and down from 180 days one year ago.