National Flipping Activity as of Q1 2016

“House Flipping” is a term common to real estate investors when a house is bought by an investor who then renovates, repairs and re-sells it within a short period of time (usually within one year) for a profit.

According to data analysis by CoreLogic, using more than 100 million residential property public records, the ratio of house flipping among all home sales across the country is at 4.4 % as of Q1 2016. That is lower than its peak value of 6.4% in Q1 2005. The median gross profit per flipped house during this period was $56,000; 17% higher than its peak value of $48,000 before the housing crash in Q3 2005.

However, the median percentage of gross profit has decreased to 41.1% from its peak value of 47.7% in 2009. CoreLogic suggests that the decrease might be the result of “the decline of the share of distressed sales, which has declined significantly and is slightly above 11% in January of 2016”.

The data also suggests that it is now taking longer to flip a house than before. Prior the housing bubble burst, the longest average time to flip a house was 150 days (in Q2 2006), while it takes about 154 days on average to flip a house now (Q1 2016) and the trend appears to be continuing.

CoreLogic provided the lists of the top 20 markets among the 86 largest Core Based Statistical Areas (CBSAs), with the highest levels of flipping activity in Q1 2016.The highest share of flipped properties is in Memphis, TN, followed by Fresno, CA and Lakeland-Winter Haven, Fl. The median gross profit per flipped property ranges from $23,430 to $124,000 in the top 20 markets. Los Angeles-Long Beach-Glendale, CA has the second highest median gross profit of $122,500 per flipped property. It takes an average of more than three and a half months (111 days) to flip a property in Memphis and more than five and a half months (168 days) to flip a property in Los Angeles-Long Beach-Glendale, CA. The median percentage gross profit ranges from a low of 20.2 percent in San Jose-Sunnyvale-Santa Clara to 68.4 percent in Chicago-Naperville-Arlington Heights, IL. Flipping activity is strongest among Florida CBSAs (Core Based Statistical Areas) as of Q1 2016. Seven of the top 10 markets for flipping and eight of the top 20 markets for flipping are in Florida.

The 20 markets with the lowest levels of flipping activity in Q1 2016 among the 86 CBSAs analyzed, according to CoreLogic, are in Connecticut. Hartford-West Hartford-East Hartford, CT has the lowest share of flipped properties, followed by New Haven-Milford, CT and Bridgeport-Stamford-Norwalk, CT. The median gross profit per flipped property ranges from $18,000 in Winston-Salem, NC to $120,000 in New York-Jersey City-White Plains, NY-NJ. The median percentage gross profit ranges from 13.3 percent in Honolulu, HI to 84 percent in Hartford-West Hartford-East Hartford.

On average, lower-activity markets take longer to flip a property than in higher-activity market.

Source: CoreLogic|Is Flipping Coming Back?

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