The newly released first-quarter 2020 U.S. Home Flipping Report from ATTOM Data Solutions shows that “53,705 single-family homes and condominiums in the United States were flipped in the first quarter. That number represented 7.5 percent of all home sales in the nation during the quarter, up from 6.3 percent in the fourth quarter of 2019 and from 7.3 percent in the first quarter of last year.” Those are the highest numbers since the second quarter of 2006.
The gross profit for home flips across the country also rose over the same time period, to $62,300. “That was up slightly from $62,000 in the fourth quarter of 2019 and from $60,675 in the first quarter of last year,” the report said.
If you’re looking to get in on the flipping trend, here are a few insights:
- You don’t need to buy a million-dollar fixer. “Homes flipped in the first quarter of 2020 were sold for a median price of $232,000.”
- Profits will be larger where the home prices are higher. “The highest first-quarter 2020 profits, measured in dollars, were concentrated in the West and Northeast. Among metro areas with enough data to analyze, 13 of the top 15 were in the those regions, led by San Francisco, CA (gross profit of $171,000); San Jose, CA ($165,000); Los Angeles, CA ($145,000); New York, NY ($141,899) and Honolulu, HI ($140,190).”
- The lowest profits were generally in southern metro areas, such as “Springfield, MO ($20,203); Daphne, AL ($20,650); Raleigh, NC ($21,250) and Durham, NC ($25,000).”
- Don’t think you have to turn the home around and sell it in 30 days. “The average time to flip nationwide is 174 days.”
- You don’t need to pay cash upfront for the home, as the percentage of flipped homes purchased with financing in the first quarter of 2020 was 40.5 percent.