Where Flips Are Rising Despite Cooling Home Prices

Flips are rising in metros like Orlando

Even as home prices start to cool, the market for investors who want to flip homes for a quick profit remains hot. Part of the reason flips are rising is because millennials “want to move into a home that requires minimal work,” Charles Tassell, chief operating officer of the National Real Estate Investors Association, told realtor.com®.

“A house that has already been rehabbed or flipped [and is priced lower than new construction] is really what they are looking for.”

Home flipping profits nationally—not including rising renovation costs—have gradually decreased over the last four years, dropping from a 42 percent return to 38 percent, according to realtor.com®. Still, the overall number of flips nationwide rose 3.5 percent in September compared to a year earlier, according to realtor.com®’s analysis.

Realtor.com® evaluated home sales in the 200 largest metro areas for July, August, and September 2018 and compared them to the same period a year earlier. Realtor.com® defined a home flip as any type of home bought and resold within a three- to 12-month period.

These metros are seeing some of the largest growth in home flipping:

1. Raleigh, N.C.

  • Median home price: $340,000
  • Increase in home flips: 63.4%
  • Difference between purchase and sale prices: 32%

2. Charlotte, N.C.

  • Median home price: $323,300
  • Increase in home flips: 42.5%
  • Difference between purchase and sale prices: 36%

3. Orlando, Fla.

  • Median home price: $300,000
  • Increase in home flips: 37.1%
  • Difference between purchase and sale prices: 41%

4. Phoenix

  • Median home price: $330,000
  • Increase in home flips: 35.7%
  • Difference between purchase and sale prices: 36%

5. Las Vegas

  • Median home price: $320,000
  • Increase in home flips: 33.7%
  • Difference between purchase and sale prices: 38%

Meanwhile, home flipping is down by the largest amounts over the past year in Columbus, Ohio (-18.8%) and Cape Coral, Fla. (-14.4%).

 

Source: “Where Flips Are Rising Despite Cooling Home Prices,” REALTOR Magazine

Posted in: