More House Flipping, Less Profit

Home flipping saw a slight increase in the second quarter but profits continue to fall as investors struggle to find cheap properties, according to ATTOM Data Solutions latest report…(ATTOM)

  • Q-O-Q: The rate of single-family home flipping was up 1.4 percentage points to 4.9% in Q2 to 79,733.
  • Y-O-Y: The rate of single-family home flipping was down 1.9 percentage points from Q2 2020.

As prices rise for all properties, flippers are struggling to find heavily discounted homes. This means lower profit margins…

  • Q-O-Q: Profit margins fell 3.7 percentage points to 33.5% ROI in Q2 of 2021.
  • Y-O-Y: The ROI in Q2 was down 7.1 percentage points from the same quarter last year.

NOTE: Gross profits were up 2.4% to $67,000 from Q1 and were up 3.1% from Q2 2020.

  • What is hurting profit margins is the rising cost of all homes. In fact, the median price of homes flipped soared to an all-time high of $267,000 in Q2. That was up 10.6% from Q1 and18.7% from Q2 2020.

Time on market has recently seen historic lows and home-flipping is no different. Home flippers took an average of 147 days to complete the transactions in the second quarter of 2020 This is the lowest level since the third quarter of 2010.

  • NOTE: In the first quarter of 2021, home flippers took an average of 156 days to complete the transaction and 183 in the second quarter of 2020.

🔥 TYLER’S HOT TAKE: Until A&E brings back “Flip This House” we will know that home-flipping hasn’t reached peak yet.