Fewer single-family homes were flipped in the second quarter, with the percentage dipping to a two-year low, according to RealtyTrac’s U.S. Home Flipping Report.
Nearly 31,000 single-family homes were flipped nationwide during the second quarter, representing 4.6 percent of U.S. single-family home sales. That’s down from 5.9 percent in the first quarter of this year and down from 6.2 percent in the second quarter of 2013, RealtyTrac reports. RealtyTrac calculates home flips by counting homes that are purchased and subsequently sold again within 12 months.
On homes flipped in the second quarter, investors averaged a gross profit of more than $46,000 per flip on homes, a 21 percent gross return on initial investment, RealtyTrac reports. That is down from an average gross return of 24 percent in the first quarter and down from 31 percent a year ago, RealtyTrac notes.
“Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013,” says Daren Blomquist, vice president at RealtyTrac. “Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to.”
RealtyTrac’s second quarter report also found that higher-end homes are representing a greater percentage of homes flipped. Homes with a flipped sale price of $750,000 or higher accounted for 4.1 percent of all homes flipped during the second quarter, up 21 percent from a year ago, RealtyTrac reports. Homes with a flipped price between $400,000 to $750,000 made up 12.66 percent of all flips, up 10 percent from a year ago.
At Landmark Group we can help you buy or sell homes to renovate and flip, or properties to hold as rentals or other types of investment properties, including commercial, office and industrial structures.