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 strong 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: “Real Estate Slowdown Rattles Investors: Where Flipping Is Down (and Up) the Most,” realtor.com® (Jan. 7, 2019)
