Boise City, ID
BIG DATA SANDBOX
Home Flippers Selling While Gross Profits Stumble
In ATTOM Data Solutions recently released Q1 2019 Home Flipping report, the home flipping rate reached a new high with 7.2 percent of all home sales during the quarter being a flip – the highest home flipping rate since Q1 2010. This flipping rate is up from 5.9 percent in the previous quarter and up from 6.7 percent a year ago. Diving a bit deeper ATTOM uncovered those markets with 50 or more flip sales in Q1 2019 and a population greater than 200,000, that are pushing the flipping rate upward. Eighty-five of 138 metropolitan statistical analyzed in the report (62 percent) posted a year-over-year increase in their home flipping rate in Q1 2019. However, those top 10 markets that saw the greatest home flipping rate in Q1 2019, all of them but one market had a decrease in the Gross ROI.
MARKET SPOTLIGHT
Prospecting for Opportunity HOW THE PACIFIC NORTHWEST IS FARING AMIDST SUPPLY AND DEMAND.
Home Flipping Rate
Market
YoY Pct Change in Gross ROI
11%
13.0%
Memphis, TN-MS-AR
1
22%
11.4%
Huntsville, AL
2
BY JOEL CONE, STAFF WRITER
27%
11.4%
Phoenix-Mesa-Scottsdale, AZ
3
A s in many parts of the country these days, there are still deals to be had in the Pacific Northwest region, a favorite region for inves- tors looking to purchase property at far below the inflated prices of places like California and New York. However, current market conditions demand that investors be increas- ingly creative in their prospecting for those opportunities. With the Great Recession over, the times of bargain basement priced properties in the Pacific Northwest (PNW) are in the rearview mirror. “From a regional aspect, we con- tinue to see migration from Califor- nia to Washington and Oregon,” said Matthew Gardner, Chief Economist at Windermere Real Estate. “Are Seattle and Portland continuing to suffer from housing affordability? Certainly, they are for several rea- sons. They are running out of land. They’re not building enough housing
to meet immigration growth, and we have more demand than supply.” Likewise, Boise is having its share of problems dealing with its own land use issues and lack of available housing while its popula- tion numbers continue to increase. Still, given that housing afford- ability — and homelessness — are genuine concerns, the question remains whether Boise, Portland, and Seattle will continue to be pop- ular choices for investors looking for somewhere to park their money despite rising home prices and unbalanced inventory levels.
population and jobs. But, the real estate market is in high demand and short on supply, making it a tough market to find deals. An associate broker with Ist Place Realty and a real estate investor, Cameron Williams char- acterizes what’s happening in the Boise market at present as “crazier than last year” though investors continue to come in to the area particularly from California. Home to a population of 217,000 people, Boise topped Forbes list for the fastest-growing cities in the country for 2018. “Between Boise and Nampa (the metro area) including Twin Falls, we have around half of the state [popu- lation] here,” said Donald W. Holley, emeritus faculty at Boise State Uni- versity’s Department of Economics. “In total, about 20 percent of the immigrants coming here are from California and 12 percent are coming
22%
11.1%
Atlantic City-Hammonton, NJ
4
48% 39%
10.9% 10.6%
Las Vegas-Henderson-Paradise, NV
5
Durham-Chapel Hill, NC
6
63%
10.3%
Raleigh, NC
7
62%
10.2%
Charlotte-Concord-Gastonia, NC-SC 8
17%
10.1%
Tampa-St. Petersburg-Clearwater, FL 9
57%
10.0%
Clarksville, TN-KY 10
BOISE: TOUGH BUT NOT IMPOSSIBLE
The economic indicators for the Boise metro area are enticing for real estate investors. Being the state capital, the overall numbers look good for future growth in both
ATTOM Data Solutions analyzed sales deed data for this report. A single-family home or condo flip was any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months. The average gross flipping profit is the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping veterans estimate typically run between 20 percent and 33 percent of the property’s after repair value). Gross flipping return on investment was calculated by dividing the gross flipping profit by the first sale (purchase) price.
24 think realty housing news report
august 2019 25
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