Today, RealtyTrac® released its Q3 2015 U.S. Home Flipping Report, which shows that 43,197 single family homes and condos were flipped — sold as part of an arm’s length sale for the second time within a 12-month period — in the third quarter of 2015, 5.0 percent of all single family home and condo sales during the quarter.
While third quarter house flips were down from second quarter of 2015, they were up 18% over last year’s Q3, when house flips registered their lowest level since 2000.
Daren Blomquist, VP of RealtyTrac, says, “After curtailing flipping activity last year due to slowing home price appreciation and shrinking inventory of flip-worthy homes, real estate investors have started to jump back on the flipping bandwagon in 2015. On the acquisition side, investors are finding creative ways to pinpoint potential flips in the off-market arena, and on the disposition side investors have a bigger pool of potential buyers thanks to a surge in FHA buyers this year, many of them first-time buyers looking for starter homes.”
While tracking flips, RealtyTrac can only take into account the difference between the purchase price and the flipped price — they can’t include rehab costs and other expenses because they vary so greatly. Flipping experts estimate 20%-33% of the after repair value for rehab costs. The average gross flipping profit was $62,122, down slightly from second quarter but up from third quarter last year.
The average ROI was 33.8%, down from the second quarter but up from 32.7% Q3 last year.
Where Are Flippers Making the Most Money?
The five states (plus DC) with the highest average gross flipping ROI were:
- Pennsylvania — 57.2%
- Illinois — 54%
- Maryland — 53.6%
- Rhode Island — 48.1%
- Louisiana — 47.9%
- Washington, DC — 55.9%
Specific markets where flipping numbers ran high are:
- Pittsburgh — 78.4%
- New Orleans — 73.1%
- York, PA — 64.5%
- Punta Gorda, FL — 61.3%
- Clarksville, TN — 59.6%
Markets where flipping was higher than the national average include:
- Las Vegas — 8.7%
- Miami — 8.6%
- Jacksonville, FL — 7.6%
- Baltimore — 7.4%
- Birmingham, AL — 7.4%
- Phoenix — 7.3%
- Orlando — 7.2%
- New Orleans — 6.9%
- Virginia Beach — 6.8%
- Riverside-San Bernardino in Southern California — 6.5%
Where Are Flippers Most Active?
States with highest share of home flipping as a percentage of all single family home and condo sales were:
- Nevada — 8.4%
- Florida — 7.9%
- Alabama — 7.5%
- Arizona — 6.9%
- Tennessee — 6.6%
Best Counties for Flipping to Millennials
Combining data from this report and the US Census demographic data, 18 counties were identified as having both high gross returns on flipped houses and having a significant portion of the population falling into the “Millennial” category (ages 20-34). The top 5 counties with average gross flipping profits of 63% or more are:
- Philadelphia County, PA
- Saint Louis, MO
- Baltimore, MD
- Cumberland County, NC
- Kings County, NY (Brooklyn)
Best Markets for Flipping to Baby Boomers
Using those same reports, 15 counties were identified as best for flipping to Baby Boomers (ages 49-67), with the top five counties all in Florida:
Related: 4 Expert Tricks for Finding Flip Deals in a Tight Market
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