The 245,864 single-family homes and condos flipped in 2019 was the highest level since 2006, according to a report from ATTOM Data Solutions.
ATTOM’s 2019 U.S. Home Flipping Report found that flips increased 2 percent from 2018, as the number of homes flipped in 2019 represented 6.2 percent of all home sales, an eight-year high.
However, as flipping activity increase, profit margins continued dropping. ATTOM said homes flipped in 2019 typically generated a gross profit of $62,900, down 3.2 percent from $65,000 in 2018 year and 6 percent from the post-recession peak of $66,899 in 2017.
The typical gross flipping profit of $62,900 translated into a 40.6 percent return on investment (ROI), down from a 45.8 percent gross flipping ROI in 2018 and down from 51.4 percent ROI 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,” ATTOM Chief Product Officer Todd Teta said in a release. “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 said. “But profits did continue to decline again for investors.”
The report said the largest annual increases in the home-flipping rate came in Laredo, Texas (up 103.5 percent); followed by Raleigh, N.C. (up 59.8 percent); Charlotte, N.C. (up 44.1 percent); Fort Smith, Ark. (up 43.2 percent) and Columbus, Ga. (up 40.5 percent).
ATTOM said home flippers who sold homes in 2019 took an average of 178 days to complete the flips, down slightly from an average of 179 days for homes flipped in 2018.