All data points to a continued decline in foreclosure stock last year, but that didn’t stop home flippers from stepping up their game.
RealtyTrac released on Thursday its Year-End and Q4 2013 Home Flipping Report, which shows single-family home flips—in which a home is purchase and sold again within six months—totaled 156,862 last year, up 16 percent from 2012 and 114 percent from 2011.
According to the company, home flips accounted for 4.6 percent of all single-family home sales in 2013, up from 4.2 percent the prior year and 2.6 percent in 2011. In the fourth quarter alone, flips made up 3.8 percent of sales, a decline from 3.9 percent in Q3 2013 and 7.1 percent in Q4 2012.
The average gross profit for a home flip last year was $58,081, up nearly $13,000 from the 2012 average.
“Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase,” said RealtyTrac VP Daren Blomquist.
According to Blomquist, 21 percent of all properties flipped last year were purchased out of foreclosure, down from 27 percent in 2012.
“Meanwhile flipped homes were still purchased at an average discount of 13 percent below market value in 2013, the same average discount as 2012, indicating that investors are finding discounted buying opportunities outside of the public foreclosure process—particularly in those markets with the biggest increases in flipping for the year,” he added.
One of those markets was Virginia Beach, which saw flipping activity jump 141 percent compared to 2012.
Also more active were Jacksonville, Florida (+92 percent); Baltimore, Maryland (+88 percent); Atlanta, Georgia (+79 percent); and Richmond, Virginia (+57 percent).
Meanwhile, a number of once-popular investment markets reported some of the most significant decreases in home flipping, including Phoenix, Arizona (-32 percent), and Sacramento, California (-5 percent).