Photo: Robert Clark
Home flipping in the US reached an 11-year high in 2017.
While current levels remain well below the peak recorded during the housing bubble, the practice still climbed to new decade-long highs for the last two years, according to ATTOM Data Solutions, curator of the country’s largest property database.
The home flipping peak was recorded in 2005, the height of the housing bubble, when 342,623 homes were flipped. Not long after, some 131,723 homes were flipped in 2007 — the lowest recorded level following the burst of the bubble.
Despite a noticeable decline by nearly 20,000 flipped homes in 2014, the number has hovered consistently in the 180,000 range in the years since the crisis — specifically, between 2010 and 2015.
There were 204,167 homes flipped in 2016, which marked the first year the number of homes exceeded 200,000 since 2006.
The number of homes flipped, including single-family homes and condos, topped 200,000 for the second consecutive year, with 207,088 homes flipped in 2017.
“A extended housing boom is giving real estate investors — particularly newbie real estate investors — more confidence in the housing market, convincing them to jump on the home flipping bandwagon. Additionally, rapidly rising home prices is giving investors a cushion when flipping homes. Lastly, there has been an increase in the availability of financing for home flips, particularly from online lenders focused on providing quick and easy loan qualification,” Senior Vice President of Communications at ATTOM Daren Blomquist tells BuzzBuzzNews.
It took an average of 182 days to complete the flip in 2017, which tied with 2016 for the highest average number of days to flip since 2006.
Fewer home flips went to FHA borrowers, presumably first-time homebuyers, in 2017. Of all the homes flipped in 2017, nearly 18 percent went to FHA borrowers — falling to a three-year low. These loans are insured by the Federal Housing Administration (FHA) and are designed for low-to-moderate income borrowers who are not able to make large downpayments.
Home flipping profits were also up substantially in 2017. Completed flips yielded an average gross profit of $68,143 — the difference between the median purchase price and the median flipped sale price. This was up 5 percent from 2016, hitting a new all-time high since the data was first tracked in 2000.
Among the largest metros analyzed for the report, Memphis, TN recorded the highest home flipping rate in 2017. Other metros with high rates of home flipping included: Las Vegas, NV, Tampa-St. Petersburg, FL, Birmingham, AL and Phoenix, AZ.
Home flipping saw large annual increases in both the New York City and New York-Northern New Jersey metro areas, up 34 percent and 29 percent, respectively.
And while the home flipping phenomenon may be seeing a resurgence in popularity, current trends are not mirroring the ones seen during the housing bubble.
“The surge in home flipping in the last three years is built on a more fundamentally sound foundation than the flipping frenzy that we witnessed a little more than a decade ago,” says Daren Blomquist, senior vice president at ATTOM Data Solutions, in the digital release.
Click here to read the entire release.