2016 Home Flipping Hits 10 Year High

2016 home flipping hits 10-year high

IRVINE, Calif. – March 9, 2017 – Home flipping last year was 3.1 percent higher than it was in 2015, according to ATTOM Data Solutions' 2016 Year-End U.S. Home Flipping Report. The report finds that 193,009 single family homes and condos were flipped – resold in an arms-length transfer for the second time within a 12-month period – in 2016.

In 2006 with a recession on the horizon, 276,067 single family homes and condos were flipped. In 2005, 338,207 single family homes and condos were flipped – 8.2 percent of all sales. The study included 950 U.S. counties that cover 80 percent of the population.

In addition, the number of buyers flipping homes has increased. In 2016, 126,256 entities – a number that includes both individuals and institutions – flipped homes in 2016. That's less than a 1 percent increase of 2015 but the highest number since 2007.

Meanwhile, the share of flipped homes purchased by the flipper with financing increased to an eight-year high of 31.5 percent in 2016. The median age of homes flipped increased to 37 years – a new high going back to 2000, as far back as data is available – and the median square footage of flips decreased to 1,422 – a new record low going back to 2000.

"The combination of more home flips and a greater share of financing for flip purchases resulted in a 19 percent jump in the estimated dollar volume of financing for home flip purchases, up to $12.2 billion for the flips completed in 2016 – a nine-year high," says Daren Blomquist, senior vice president at ATTOM Data Solutions.

Blomquist says that more home flippers are now willing to "move to secondary and tertiary housing markets and neighborhoods with older, smaller properties that are available at a deeper discount," Blomquist says, a change that also led to "a higher share of the flipped homes sold to FHA buyers," a share that hit a four-year high of 19.6 percent in 2016."

2016 home flipping profits: New record highHomes flipped in 2016 sold for a median price of $189,900, a gross flipping profit of $62,624 above the median purchase price of $127,276, with a gross flipping return on investment (ROI) of 49.2 percent. Both the gross flipping dollar amount and ROI were the highest going back to 2000, the earliest year flipping data is available.

While no Florida metro areas hit ATTOM's top 10 for ROI, a one Florida city is noted for having a population of at least 1 million and a flipping ROI over 75 percent: Jacksonville (75.8 percent.

Home flipping rates

Tennessee, California and Florida metro areas logged the higher home flipping rates. Among 117 metropolitan statistical areas with at least 250 home flips in 2016, those with the highest home flipping rate as a percentage of all home sales were Memphis, Tennessee (11.7 percent); Clarksville, Tennessee (10.1 percent); Visalia-Porterville, California (10.1 percent); Tampa-St. Petersburg, Florida (9.9 percent); and Deltona-Daytona Beach-Ormond Beach, Florida (9.9 percent).

Along with Memphis and Tampa-St. Petersburg, other metro areas with a population of at least 1 million and a 2016 home flipping rate of at least 7 percent were Las Vegas (9.2 percent); Miami (8.8 percent); Orlando (8.3 percent); Phoenix (8.0 percent); New Orleans (7.9 percent); Jacksonville, Florida (7.7 percent); Virginia Beach (7.6 percent); Baltimore (7.4 percent); Birmingham (7.4 percent); St. Louis (7.1 percent); and Nashville (7.1 percent).

© 2017 Florida Realtors