ATTOM Data Solutions has released a new housing report with data from the first quarter of 2018, and the news is mostly great for house flippers around the country. He’s a breakdown of the report:
Houses are getting flipped at a higher rate than they have for the last six years. In the first quarter, flips made up 6.9% of all home sales, up 1% from the previous quarter and even with the rate one year ago. The current rate of flipped homes matches the highest rate since the first quarter of 2012. The market with the highest rate of house flipping is Memphis, TN, at 15.1%. When broken down by zip code, five neighborhoods have flipping rates over 30%, including the 90047-area of Los Angeles.
House flipping is taking off in some markets and declining in others. While the overall number of flips is high, there is a lot of variation from market to market, largely due to the tight housing inventory in many parts of the country. For example, in tight markets like Los Angeles and Miami, the rate of flipped houses went down. But in smaller markets like Baton Rouge, house flipping spiked by 70% year-over-year.
The average gross profit for homes flipped in the first quarter of 2018 was $69,500. That translates to an average 47.8% gross return on investment, down slightly from the fourth quarter of 2017. This marks a three-year low from the 50.1% average gross ROI of the second quarter of 2015.
The share of rehab homes purchased with financing rose to a nine-year high. 35.7% of flipped homes were originally purchased with house flipping loans in the first quarter of 2018. That’s up from 35.3% the previous quarter and 33.5% one year ago.
As ATTOM Data puts it, the current housing market is a double-edged sword for flippers, because while the risks are currently quite low and the turn-around times are fast, the initial investment required to get into the game is incredibly high, and the competition is fierce.
The house flippers who come out on top in this tight marketplace are flippers with fast and affordable rehab loans. ZINC Financial’s house flipping loans help clients secure homes faster and complete renovations on schedule. Give our office a call at 559.326.2509 to learn more.