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Home flipping up 18 percent year over year

Home flipping in the Charlotte region was up 18 percent year over year in the second quarter, one of the largest increases in the country, according to ATTOM Data Solutions, the new parent company of RealtyTrac.

The company reported that 622 homes were flipped in the metropolitan statistical area in the second quarter, accounting for 5.1 percent of all sales, which ranked Charlotte 64th among the 101 metropolitan areas included. That was down 16 percent from the first quarter, but up 18 percent from last year.

ATTOM defines a flip as a property that is sold in an arms-length sale for the second time within a 12-month period, based on recorded sales deed data.

The median purchase price of a flipped house was $115,000, and the flipped price was $162,000, for a gross profit of $47,000, a 40.9 percent return on investment, or ROI. That was down 13 percent year over year from a 47.1 percent return, and ranked the area 74th and represented the 13th largest decline among the 101 areas studied.

Only 15 regions saw a larger increase in the rate of home flipping.

In the Albany, New York, area, flips were up 47 percent. The only North Carolina area to see a greater increase in the rate of flips was in Durham-Chapel Hill, up 27 percent year over year.

Nationally, flips were up 3 percent year over year and 14 percent over the first quarter. A total of 51,434 single-family homes and condos were flipped in the second quarter, a six-year high and the most since the third quarter of 2010, according to ATTOM.

“Home flipping is becoming more accessible for smaller operators thanks to an increasingly competitive lending environment with more loan options for real estate investors, who are also benefitting from the historically low mortgage interest rates,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “That favorable lending environment for flippers has helped to fuel the recent flipping frenzy we’ve seen over the past five quarters.”

The highest flipping rate was in Memphis, Tennessee, where 11.1 percent of properties sold were flips.

“We’re starting to see home flipping hit some milestones not seen since prior to the financial crisis, which is somewhat concerning, but there are a couple of important differences in the home flipping of 2016 compared to 2006 when home flipping peaked during the last housing boom,” Blomquist said. “First, home flippers are realizing a much bigger gross ROI in 2016, averaging 49 percent in the first two quarters compared to an average gross ROI of just 27 percent in 2006. Second, while an increasing number of flippers are financing their purchases, more than two-thirds are still using cash to purchase compared to about one-third using cash to purchase back in 2006.”

 

 

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