Home flipping activity is drawing investors into markets with more value-added opportunities, according to ATTOM Data Solutions’ Q3 2016 U.S. Home Flipping Report [1]. Approximately 45,718 single family home and condo sales were flipped in Q3 2016, which represented 5.1 percent of all single family and condo sales during that time period. ATTOM defines a home flip as “a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by ATTOM Data Solutions in more than 950 counties accounting for more than 80 percent of the U.S. population.”
The 5.1 percent Q3 2016 home flipping rate decreased from a 5.6 percent rate in Q2. Approximately 67.9 percent of the homes flipped in Q3 were purchased with cash, which is down from 68.2 percent in Q2 and a decrease from 69.0 percent in Q3 2015.
Areas with approximately 90 homes flipped in Q3 with lowest share purchased with cash are Colorado Springs (35.6 percent); Harrisburg, Pennsylvania (39.1 percent); Denver (44.6 percent); Seattle (52.4 percent); and Providence, Rhode Island (52.8 percent).
Daren Blomquist, SVP of ATTOM Data Solutions, said investors will be forced to look at markets that contain more opportunities for flippers. “While the macro trends of low housing inventory and rising home prices are favorable for flippers, they are also a double-edged sword, attracting more competition and reducing the availability of deals — particularly in the most fundamentally sound local markets,” he said. “This is chasing some investors into markets and neighborhoods that may be less fundamentally sound but also offer more value-add opportunities for flippers in the form of aging housing inventory.”
Memphis, Tennessee (11 percent); Clarksville, Tennessee (9.5 percent): Daytona Beach, Florida (9.3 percent); Tampa, Florida (9.3 percent); and Visalia-Porterville, California (9.3 percent) were the top five markets with at least 90 flipped homes in Q3 2016. The remaining markets in the top 10 for highest flipping rate were York, Pennsylvania (9.2 percent); Lakeland, Florida (9.0 percent); Fresno, California (8.7 percent); Miami (8.6 percent); and Las Vegas (8.2 percent).