HOUSINGNEWS REPORT
WHERE HOME FLIPPERS ARE FLOCKING, FLEEING
Home flipping rate increases in 47 percent of markets The Q3 2017 home flipping rate increased from a year ago in 44 of the 93 metropolitan statistical areas analyzed in the report (47 percent), led by Baton Rouge, Louisiana (up 140 percent); Winston-Salem, North Carolina (up 58 percent); Salem, Oregon (up 51 percent); Indianapolis, Indiana (up 51 percent); and Buffalo, New York (up 47 percent). Along with Indianapolis and Buffalo, metro areas with a population of 1 million or more that posted a year- over-year increase in home flipping rates of at least 10 percent were Louisville, Kentucky (up 22 percent); San Antonio, Texas (up 22 percent); New York, New York (up 21 percent); Cleveland, Ohio (up 17 percent); Birmingham, Alabama (up 17 percent); Charlotte, North Carolina (up 15 percent); Dallas-Fort Worth, Texas (up 14 percent); Rochester, New York (up 13 percent); Detroit, Michigan (up 12 percent); Hartford, Connecticut “Across Southern California, investors are finding home flips for investment purchases to be a challenge due to an aging housing inventory requiring greater repair cost coupled with higher acquisition costs due to low available inventory.”
(up 11 percent); and Memphis, Tennessee (up 10 percent).
Other major markets where the Q3 2017 home flipping rate decreased from a year ago included Seattle (down 8 percent), Minneapolis-St. Paul (down 18 percent); Tampa-St. Petersburg (down 9 percent); Baltimore (down 2 percent); and Denver (down 2 percent). “Although the number of flips in the Seattle market dropped back to levels not seen since early 2016, they are still well above the levels seen before the recession. I anticipate that the number of flips will continue to fall as home price growth eats into profits, which have been on the decline since 2013,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “The Seattle region housing market remains very tight in terms of inventory and this has put substantial upward pressure on prices. Flippers can function to exacerbate this issue, so the sooner we see the number of flips drop back to pre-recession levels, the better.”
Home flipping rate down in Los Angeles, DC, Miami, Boston, San Francisco The Q3 2017 home flipping rate decreased from a year ago in 49 of the 93 metropolitan statistical areas analyzed for the report (53 percent), including Los Angeles (down 6 percent); Washington, D.C. (down 6 percent); Miami (down 15 percent); Boston (down 5 percent); and San Francisco (down 2 percent). “Across Southern California, investors are finding home flips for investment purchases to be a challenge due to an aging housing inventory requiring greater repair cost coupled with higher acquisition costs due to low available inventory,” said Michael Mahon, president at First Team Real Estate, covering the Southern California housing market. ‘That equates to increased risk for return on investment that is keeping many potential investors on the sidelines.”
BY MICHAEL MAHON PRESIDENT, FIRST TIME REAL ESTATE
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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