The number of home flippers has reached its highest level since Q2 2010, according to a report by ATTOM Data Solutions.
A total of 39,775 investors completed at least one flip (i.e. selling a home for the second time within a 12-month period) in Q2 2016. Experts attributed the increased pace of home flipping to more lenient lending requirements and low interest rates. “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 benefiting from the historically low mortgage interest rates,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “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 continued.
- All-cash purchases were involved in 68.3% of home flips.
- On average, a flipped home cost $189K, with an average profit of $62K, a 48.8% return.
- On average, a home took an average 185 days to flip.
- Memphis, TN had the highest home flipping rate of 11.1% in Q2 2016
- In percentage terms, Pittsburgh, PN had the highest ROI rate of 133.3%
- In dollar terms, San Jose, CA had an average gross profit of $161K on flipped homes.
- Homes flipped for more than $5 million yielded the highest average gross ROI (73%), followed by the $50,000 to $100,000 price range (58%) and the $100,000 to $200,000 price range (58%).