Home Flips Down, Profits Up

Nearly 7% of home sales in the second quarter of 2020 were flips, representing one in 15 property transactions.

ATTOM Data Solutions found that the 53,621 flipped homes sold in the second quarter of 2020 was down percentage-wise from the first quarter, in which 7.5% of all homes sold were flips. However, the percent of homes flipped in the second quarter of 2020 was up from 6.1% year-to-year.

Flippers also saw an increase in their profits and profit margins for the second quarter of 2020. The gross profit was $67,902, an increase from $63,000 the previous quarter and up from $61,900 year-to-year. This is a 41.3% return on investment for flippers, up from 38.9% in the first quarter and 40.4% year-to-year. Homes flipped sold for a median price of $232,402 in the second quarter.

“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.”

The time it took investors to flip jumped to 183 days, up from 174 days in the first quarter, but down one day year-to-year.

Pittsburgh was cited as having the second highest ROI for flips. In the Steel City, flippers continued to see a large return of investment, reaching 135.6% in the second quarter, an increase from 132.4% year-to-year