The 48,457 U.S. single family homes and condos flipped in the first quarter of 2018 were 4 percent less than the previous quarter and down 3 percent from a year ago, according to ATTOM Data Solutions.
According to ATTOM’s Q1 2018 U.S. Home Flipping Report, the number of holes flipped in the first quarter reached a two-year low. The 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.
“The 2018 housing market is a double-edged sword for home flippers,” ATTOM Data Solutions Senior Vice President Daren Blomquist said in a release. “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.”
Homes flipped during the first quarter returned 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 the first quarter of 2017 to the highest average gross flipping profit since ATTOM began tracking in 2000.
ATTOM said the average gross flipping profit of $69,500 in the first quarter represented an average 47.8 percent return on investment (ROI) compared to the original acquisition price, down from a 48.9 percent average gross flipping ROI in the fourth quarter of 2017 and down from an average gross flipping ROI of 50.3 percent one year ago.
ATTOM said the home flipping rate declined in 75 of the 136 metropolitan statistical areas analyzed in the report, including Miami (down 16 percent); Los Angeles (down 3 percent); Tampa-St. Petersburg (down 13 percent); Washington, D.C. (down 6 percent); and Las Vegas (down 2 percent).
Home flipping rates were up in 45 percent of the metropolitan areas analyzed, ATTOM found. Markets where home flipping rates increased during the first quarter included Baton Rouge, La. (up 70 percent); Lincoln, Neb. (up 62 percent); Madison, Wis. (up 55 percent); and Columbia, S.C. (up 48 percent).
The highest home flipping rates in the first quarter were in Memphis, (15.1 percent); Albany, Ore. (11.7 percent); East Stroudsburg, Pa. (11.4 percent); York, Pa. (10.4 percent); and Merced, Calif. (10.3 percent), ATTOM found.
The highest average gross flipping ROIs in the first quarter were in East Stroudsburg, Pa. (164.1 percent); Pittsburgh (146.6 percent); Atlantic City (133.3 percent); Reading, Pa. (120.8 percent); and Philadelphia (110.2 percent), ATTOM found.
For the quarter, metro areas with average gross flipping ROIs of at least 89 percent were Cleveland (109.5 percent); Baltimore (102.9 percent); New Orleans (98.8 percent); Buffalo (96.4 percent); and Memphis (89.1 percent).
ATTOM said homes flipped in first quarter took an average of 183 days to complete the flip, up from an average 179 days for homes flipped in fourth quarter of 2017 and unchanged from a year ago.