Investors Back Away From Home Flipping

Realty Trac Staff  |   June 12, 2017

Investors are retreating from flipping houses, showing skepticism that the practice will continue to pay off. About 43,615 single-family homes and condos were flipped in the first quarter of 2017, down 8 percent from the previous quarter and 6 percent from a year ago, according to ATTOM Data Solutions’ Q1 2017 U.S. Home Flipping Report. It represents the lowest number of flips in two years. ATTOM Data Solutions defines a flip as a home that has been sold twice within a 12-month period. Home flips accounted for 6.7 percent of all single-family and condo sales for the quarter, one-third of which were purchased with financing. That’s up from 31.9 percent that were financed in the fourth quarter of 2016, setting the highest level since the third quarter of 2008. “With low interest rates and available lenders willing to provide non–owner-occupied loans, we are seeing many of our investors across Southern California take advantage of leverage financing when participating in housing flips,” says Michael Mahon, president of First Team Real Estate. The states with the highest home-flipping rates in the first quarter of 2017 were: The District of Columbia: 10.7 percent Nevada: 9.8 percent Alabama: 9 percent Tennessee: 8.9 percent Maryland: 8.5 percent Missouri: 8 percent The cities with the highest home-flipping rates were: Memphis, Tenn.: 15.1 percent York-Hanover, Pa.: 12.5 percent Fresno, Calif.: 11.1 percent Birmingham, Ala.: 10.3 percent Las Vegas: 10 percent