[ad_1]
After dropping for eight of the last nine quarters, home flipping profits increased as investor interest grew amid rising resale prices.
Key Takeaways
A new report shows the decline in returns on flipped homes may have hit the bottom in the first quarter, with improvements in both investor interest and returns on investments. Profits and investment returns on flipped homes remain near a decade low, but their improvement from the 2022 fourth quarter signaled a potential end to the recent decline in home flipping.
The ATTOM first quarter 2023 U.S. Home Flipping Report showed that homeowners flipped 72,960 U.S. single-family homes and condominiums in the first three months of 2023, representing 9% of all sales in the quarter. That’s up from 8% in the 2022 fourth quarter, showing that more investors are flipping properties.
Home flipping investors typically made a gross profit of $56,000, or a profit margin of 22.5%. That’s down from 26.9% in the 2022 first quarter and well off of the record level of 51.5% in 2020, but up from 21.7% in the fourth quarter last year.
“Home-flipping investors across the U.S. may have finally halted the decline,” said Rob Barber, CEO of ATTOM, who added that the uptick could be a “blip.” “Nevertheless, the first-quarter trends offer some hope for investors indicating that brighter times may lie ahead.”
One reason profit margins went up is that median resale prices of homes were higher than when these homes were bought in previous quarters. The study from the real estate data firm defines a home flip as two sales at the same address within a 12-month period between “arms length” buyers who are acting on their own interests.
Flips accounted for the highest percentage of real estate sales in Macon, Ga., where 16.8% of sales were flipped, followed by 15.3% in Atlanta and 15.2% in Jacksonville, Fla. The markets with the largest returns on investments were Scranton, Pa., with a 121.9% return, followed by a 109.8% return in Pittsburgh and a 94.9% return in Flint, Mich.
[ad_2]
This article was originally published by a www.investopedia.com . Read the Original article here. .