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Flipping Moves on Up as Profits Rise 19 Percent

Flipping Moves on Up as Profits Rise 19 Percent

Higher prices and fewer foreclosures have not put a dent in the flipping business.  In fact, last year saw 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16 percent from 2012 and up 114 percent from 2011, according to RealtyTrac’s Year-End and Q4 2013 Home Flipping Report.

Homes flipped in 2013 accounted for 4.6 percent of all U.S. single family home sales during the year, up from 4.2 percent in 2012 and up from 2.6 percent in 2011. Flips accounted for 3.8 percent of all sales in the fourth quarter, down slightly from 3.9 percent of all sales in the third quarter and down from 7.1 percent of all sales in the fourth quarter of 2012 — the highest percentage of sales represented by flips in a single quarter since RealtyTrac began tracking flipping data in the first quarter of 2011.

The average gross profit for a home flip — the difference between the flipped price and the price the flipper purchased the property for — was $58,081 for all U.S. homes flipped in 2013, up from an average gross profit of $45,759 in 2012. The average gross profit for homes flipped in the fourth quarter was $62,761, up from 52,746 in the fourth quarter of 2012, a 19 percent increase.

The report also shows the biggest increases in flipping nationwide occurred on homes with a flipped price of $400,000 or more. Although flipping increased across all price ranges, flips on homes with a flipped sale price above $400,000 increased 36 percent from 2012, while flips on homes with a flipped sale price at or below $400,000 increased 17 percent from 2012.

The average time to complete a flip nationwide was 84 days in 2013, down from 86 days in 2012 and down from 100 days in 2011.

“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 Daren Blomquist, vice president of RealtyTrac. “For the year 21 percent of all properties flipped were purchased out of foreclosure, but that is down from 27 percent in 2012 and 32 percent in 2011. 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.”

Major metro areas with big increases in home flipping in 2013 compared to 2012 included Virginia Beach (up 141 percent), Jacksonville, Fla., (up 92 percent), Baltimore, Md. (up 88 percent), Atlanta (up 79 percent), Richmond, Va., (up 57 percent), Washington, D.C. (up 52 percent) and Detroit (up 51 percent).

Major markets with big decreases in home flipping in 2013 compared to 2012 included Philadelphia (down 43 percent), Phoenix (down 32 percent), Tampa (down 17 percent), Houston (down 17 percent), Denver (down 15 percent), Minneapolis (down 9 percent), and Sacramento (down 5 percent).

 

U.S. and State Home Flipping Data — Year-End 2013

State

2011 Flips

2011 Pct of All Sales

2012 Flips

2012 Pct of All Sales

2013 Flips

2013 Pct of All Sales

Avg Gross Profit

U.S. Total

73,453

2.6%

135,421

4.2%

156,862

4.6%

$58,081

Alabama

814

1.9%

851

3.3%

1,620

5.1%

$20,926

Alaska*

19

0.4%

30

0.6%

31

0.4%

Arizona

6,994

5.9%

9,720

8.0%

6,830

6.3%

$53,195

Arkansas

410

1.9%

502

2.8%

903

4.0%

$32,394

California

14,490

3.8%

21,152

4.9%

21,796

6.0%

$99,999

Colorado

5,001

7.0%

3,492

4.2%

3,071

3.5%

$62,037

Connecticut

325

1.7%

333

1.7%

325

1.7%

$29,882

Delaware

176

1.9%

204

2.1%

679

6.4%

District of Columbia

82

4.5%

84

4.4%

98

4.8%

$215,138

Florida

7,950

3.5%

16,417

5.8%

19,619

6.4%

$38,429

Georgia

2,280

1.8%

3,534

2.7%

6,650

5.0%

$19,327

Hawaii

125

1.5%

100

1.1%

47

0.6%

Idaho*

240

1.4%

298

2.0%

309

1.6%

Illinois

1,315

1.6%

3,888

3.8%

5,388

4.3%

$63,179

Indiana*

2,590

3.7%

1,479

2.6%

1,006

1.4%

$6,478

Iowa

707

2.6%

591

3.0%

681

2.1%

$28,338

Kansas*

31

0.3%

21

0.2%

30

0.2%

$3,600

Kentucky

354

1.7%

968

5.8%

571

2.3%

$24,384

Louisiana*

481

1.5%

1,252

4.2%

1,499

4.7%

$41,454

Maine*

6

0.3%

13

0.5%

37

0.8%

Maryland

1,037

2.3%

2,014

3.8%

3,522

6.2%

$98,122

Massachusetts

742

2.0%

752

1.9%

874

2.3%

$103,384

Michigan

1,376

1.2%

5,504

4.6%

8,039

6.3%

$24,669

Minnesota

887

1.8%

4,550

8.7%

3,891

6.6%

$62,202

Mississippi*

733

2.4%

153

1.6%

19

0.3%

Missouri*

767

1.6%

1,199

2.1%

981

1.4%

$15,345

Montana*

36

0.6%

151

2.2%

49

0.5%

Nebraska

627

3.7%

2,378

11.7%

4,080

17.5%

$61,349

Nevada

3,148

6.2%

3,421

6.5%

3,680

7.5%

$43,506

New Hampshire

83

1.3%

141

2.1%

188

2.4%

$42,058

New Jersey

1,125

1.9%

5,010

7.7%

5,282

7.6%

$92,744

New Mexico*

92

0.7%

443

2.8%

91

0.5%

New York

1,616

1.7%

6,919

7.7%

10,009

10.7%

$91,970

North Carolina

1,907

2.3%

2,496

2.6%

3,372

3.0%

$36,508

North Dakota*

43

0.9%

119

4.4%

179

5.7%

$53,050

Ohio

1,481

1.5%

3,696

3.1%

4,860

3.6%

$28,025

Oklahoma

1,069

2.6%

2,275

5.4%

1,294

2.7%

$29,620

Oregon

946

2.2%

1,255

2.6%

1,248

2.5%

$71,520

Pennsylvania

1,258

1.5%

5,116

5.1%

4,291

4.1%

$56,289

Rhode Island

247

3.3%

173

2.4%

206

3.3%

$23,593

South Carolina

1,066

2.4%

2,213

4.1%

2,428

4.4%

$42,107

South Dakota

11

0.4%

0.0%

0.0%

Tennessee

1,944

2.8%

2,334

3.0%

3,523

4.0%

Texas*

1,923

0.8%

4,814

1.5%

4,762

1.2%

$18,734

Utah*

327

1.0%

620

1.6%

478

1.1%

Vermont

40

1.1%

152

3.6%

245

5.6%

$2,334

Virginia

1,721

3.0%

3,730

6.6%

6,351

8.8%

$59,802

Washington

1,457

2.4%

2,218

3.0%

2,828

3.4%

$89,525

West Virginia

4

0.2%

307

7.8%

421

9.4%

$20,533

Wisconsin

661

1.8%

2,872

7.0%

4,532

9.1%

$33,632

Wyoming*

7

0.3%

32

0.9%

31

0.7%

U.S. and State Home Flipping Data — Q4 2013 

State

Q4 2012 Flips Pct of Sales

Q3 2013 Flips Pct of Sales

Q4 2013 Flips Pct of Sales

Avg Purchase Price

Avg Flipped Price

Avg Gross Profit Q4 2013

Avg Gross Profit Q4 2012

U.S. Total

7.1%

3.9%

3.8%

$193,056

$251,094

$62,761

$52,746

Alabama

5.2%

4.8%

3.2%

$100,998

$131,943

$33,201

$21,787

Alaska*

0.4%

0.2%

0.3%

Arizona

9.0%

6.3%

6.3%

$168,773

$216,381

$49,652

$45,453

Arkansas

4.9%

1.7%

2.0%

$138,357

$159,845

$30,217

$13,661

California

5.8%

5.8%

5.9%

$306,806

$397,248

$94,395

$88,674

Colorado

3.9%

2.8%

3.7%

$211,868

$259,711

$52,639

$51,566

Connecticut

1.9%

1.4%

1.8%

Delaware

1.6%

3.5%

2.3%

$126,678

$204,292

$80,719

$75,682

District of Columbia

3.2%

5.1%

5.3%

$223,800

$384,720

$172,414

$189,929

Florida

8.6%

5.4%

5.3%

$120,657

$168,678

$50,823

$35,395

Georgia

4.4%

3.5%

3.5%

$99,126

$135,265

$37,860

Hawaii

0.5%

0.6%

0.6%

$111,333

Idaho*

1.7%

1.1%

1.3%

$84,155

$84,155

$30,000

Illinois

8.2%

4.0%

3.4%

$169,251

$222,661

$69,236

$64,712

Indiana*

2.2%

1.2%

1.3%

$162,629

$188,371

$26,500

$8,432

Iowa

4.7%

1.9%

1.7%

$128,457

$154,210

$27,992

$37,390

Kansas*

0.2%

0.3%

0.1%

$77,667

Kentucky

7.8%

1.5%

2.0%

$111,465

$134,806

$28,009

$15,043

Louisiana*

10.2%

1.8%

2.2%

$126,582

$165,518

$41,448

$37,528

Maine*

0.2%

1.0%

1.3%

Maryland

6.0%

4.4%

3.9%

$173,100

$264,479

$97,274

$100,299

Massachusetts

2.2%

2.3%

3.1%

$88,384

Michigan

11.0%

4.9%

2.5%

$80,269

$109,317

$30,976

$20,445

Minnesota

20.1%

5.1%

1.6%

$157,800

$222,977

$70,928

$76,010

Mississippi*

0.2%

0.3%

0.4%

Missouri*

2.0%

1.4%

1.7%

$32,897

Montana*

0.9%

0.8%

0.3%

Nebraska

23.1%

15.0%

18.6%

$122,352

$178,656

$60,527

$95,406

Nevada

6.9%

7.1%

8.3%

$147,818

$194,200

$50,335

$34,885

New Hampshire

1.9%

2.1%

3.4%

$33,846

New Jersey

17.3%

4.7%

4.1%

$245,155

$328,404

$118,184

$75,236

New Mexico*

7.7%

0.5%

0.6%

New York

18.5%

9.8%

10.5%

$205,179

$304,879

$104,831

$80,801

North Carolina

3.1%

2.7%

2.4%

$136,622

$157,767

$22,635

North Dakota*

7.4%

1.0%

0.8%

Ohio

5.3%

2.5%

2.3%

$90,291

$119,030

$34,162

$30,039

Oklahoma

9.7%

2.7%

3.1%

$101,664

$132,649

$35,781

$45,977

Oregon

2.8%

2.5%

2.6%

$184,976

$243,626

$69,725

$58,775

Pennsylvania

12.7%

3.3%

2.8%

$116,601

$176,815

$66,236

$32,693

Rhode Island

2.1%

2.9%

4.4%

$68,276

South Carolina

7.2%

2.9%

3.1%

$134,902

$161,132

$34,826

$32,969

South Dakota

0.0%

0.0%

0.0%

Tennessee

2.9%

3.8%

3.2%

$41,456

Texas*

2.5%

1.1%

1.5%

$102,902

$119,907

$26,452

$8,282

Utah*

1.2%

1.0%

1.6%

Vermont

7.9%

3.1%

5.1%

Virginia

12.0%

6.7%

4.2%

$262,494

$333,923

$80,792

$18,998

Washington

5.2%

3.1%

3.2%

$191,005

$271,497

$82,431

$82,057

West Virginia

17.3%

4.0%

2.5%

$39,496

Wisconsin

16.4%

10.6%

10.4%

$130,148

$168,849

$42,517

$39,885

Wyoming*

1.9%

0.6%

1.1%

*Non-disclosure state where prices are not required to be disclosed on sales deed

 

 

 

 

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