Profits for Flippers Hits Another Low

In 2022, home flipping hit a 17-year high, while gross profit margins dropped to the lowest level in 14 years.

According to ATTOM’s 2022 U.S. Home Flipping Report, 407,417 single-family homes and condos were flipped last year, up 14% from 2021 and up 58% from 2020. Of all home sales in 2022, 8.4% were flips, the largest percentage in at least 17 years. It’s an increase of 5.9% from 2021 and up 5.8% from 2020.

Despite such a high number of flips, the profit margin was just $67,900 on average in the U.S., marking a return on investment of 26.9%, when comparing the original purchase price and the price the flipper was able to sell the property for. It has dropped from 32.6% in 2021 and 41.9% in 2020. Although the median home sale price has continued to rise, it is doing so at a slower rate than previously.

Even with these challenges, 99% of the metros analyzed in the study saw an increase in flipping from 2021 to 2022. Flippers took 164 days on average to flip, just shy of six months. This is an increase from 152 days in 2021, but a decrease from 182 days in 2020.

All-cash purchases of homes-to-be flipped represented 64.8%, an increase of 0.7% from 2021 and 5.8% from 2020.

Going against the national trend, in Washington County, flippers had one of the highest profits in the country. There, flippers made $252,472 on average in 2022. In Pittsburgh, flippers made a 114.2% ROI, the biggest gross profit margin for a metro with a population of at least 1 million. In Philadelphia, flippers made a 78% gross profit margin, which was down from 106.3% in 2021, but still one of the highest in the country.