Nearly 208,000 U.S. single-family homes and condos were flipped in 2018, down 4 percent from the 216,537 home flips in 2017, according to ATTOM Data Solutions’ Q4 and Year-End 2018 U.S. Home Flipping Report.
The 207,957 homes flipped in 2018 represented 5.6 percent of all single-family home and condo sales during the year, stagnant from 5.6 percent of all sales in 2017, the report found.
A total of 146,020 individuals and institutions flipped homes in 2018, down 0.4 percent from the 146,623 entities that flipped in 2017 but up 63.1 percent from 89,539 entities that flipped 10 years ago.
“With mortgage rates remaining strong and people staying in their homes longer, we have started to see a bit of a flipping rate slowdown,” ATTOM Chief Product Officer Todd Teta said in a release. “However, this isn’t to say home flipping is going away. The market is still ripe with investors flipping and bargains still await, especially in the lowest-priced areas of the country, where levels of financial distress remain highest.”
According to the report, the total amount of financed home flip purchases in 2018 was $19.9 billion, up 8 percent from $18.5 billion in 2017 to the highest level since 2007. Flipped homes purchased with financing represented 39.1 percent of homes flipped in 2018, down from 39.4 percent in 2017 and down from 41 percent in 2008.
ATTOM said the metropolitan statistical areas (MSAs) with the highest percentage of completed flips in 2018 were Denver (53.7 percent); Providence, R.I. (51.8 percent); Seattle (51.8 percent); San Diego (51.6 percent); and San Francisco (50.8 percent).
During 2018, completed home flips yielded an average gross profit of $65,000, down 3 percent from an average gross flipping profit of $66,900 in 2017, the report said. That average gross flipping profit represented an average 44.8 percent return on investment (ROI), down from 50.3 percent in 2017 and down from an all-time high average gross flipping ROI of 51 percent in 2016.
The MSAs with highest average gross flipping ROI were Pittsburgh (144.2 percent); Scranton, Pa. (131.7 percent); Atlantic City (113.2 percent); Cleveland (112.1 percent); and Erie, Pa. (109.3 percent).
The report said homes flipped in 2018 took an average of 180 days to complete the flip, down from 181 days in 2017 but up from 159 average days to flip 10 years ago.