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House Flips Down But Profits Rebound

The second quarter experienced the flipping of 53,621 single-family homes and condominiums, or 6.7% of all home sales, according to new statistics from ATTOM Data Solutions. This represented one in 15 transactions.

The second quarter’s flipping total was down from 7.5% of all sales, or one in 13, during the first quarter, but up from 6.1%, or one in 17 sales, during the second quarter of 2019.

Homes flipped in the second quarter were sold for a median price of $232,402. The gross profit on the average home flip—defined by ATTOM as the difference between the median sales price and the median paid by investors—was $67,902 in the second quarter, up from $63,000 in the first quarter and from $61,900 in the second quarter of last year. The gross profit of $67,902 represented a 41.3% return on investment compared to the original acquisition price.

ATTOM also reported that 15.6% of flipped homes were sold to buyers using a loan backed by the Federal Housing Administration, the highest point since the second quarter of 2017. Home flippers took an average of 183 days to complete the transactions, up from an average of 174 in the first quarter but down from 184 days in the second quarter of last year.

“Home flipping was a study in contrasts in the second quarter of 2020, as the flipping rate went one way and profits went the other,” said Todd Teta, Chief Product Officer at ATTOM Data Solutions. “Far fewer house hunters were out in the market looking for homes, which probably cut into the pool of potential buyers that investors could tap. But at the same time, home flippers who were able to close deals did better than they had done in a year and a half. That likely flowed in large part from extremely low interest rates that enticed buyers who remained employed and were willing to house-hunt within social distancing requirements.”

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.

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