News Column

Single Family Home Flipping Increases 19 Percent in First Half of 2013 While Profits Soar According to RealtyTrac

Page 3 of 1

LogoTracker

IRVINE, CA -- (Marketwired) -- 07/19/13 -- RealtyTrac® (www.realtytrac.com), the leading online marketplace for real estate data, today released its Midyear 2013 Home Flipping Report, which shows 136,184 single family home flips -- where a home is purchased and subsequently sold again within six months -- in the first half of 2013, up 19 percent from a year ago and up 74 percent from the first half of 2011.

The report also shows that real estate investors made an average gross profit of $18,391 on single family home flips in the first half of the year, a 9 percent gross return on the initial purchase price. That was up 246 percent from an average gross return of $5,321 in the first half of 2012 and an average loss of -$13,206 in the first half of 2011.

Real estate investors who flipped homes in the first half of the year purchased those homes at a discount of 5 percent below estimated market value on average, and sold them at a premium of 1 percent above estimated market value on average.

"While flipping continues to be profitable in most markets, particularly those where the home price recovery is still nascent and a recent rebound in foreclosure activity allows investors to find distressed inventory at a discount, home flipping is tapering off in markets where fewer of those distressed bargains are available," said Daren Blomquist, vice president at RealtyTrac. "Out of the 100 markets we analyzed for the report, 32 had declining flipping numbers, including perennial flipping hot spots like Las Vegas, Phoenix, Southern California and Atlanta. Still flipping was on the rise in more than two-thirds of the markets, including New York, Washington, D.C., Chicago and several Florida metros."

Local broker perspectives
"Investors are back in a big way, from acquiring one-offs to larger portfolios of properties, especially in the five boroughs of New York City," said Emmett Laffey, CEO of Laffey Fine Homes International, covering Long Island and the five New York City boroughs. "As distressed properties hit the market they are sold quickly, and investors know that once the property is renovated and cleaned up the market for end users willing to pay top market dollar is strong."

"While flipping of homes continues to be of great interest to many people in the general public as they see this as an easy way to make a fast profit, the opportunity to buy and flip homes in Southern California is diminishing each month, as the price to purchase fixer-uppers continues to increase rapidly," said Rich Cosner, CEO at Prudential California Realty covering Orange, Riverside and San Bernardino counties in Southern California. "The allure of a quick profit from flipping can entice many first-time home buyers but the gross profit does not take into account the costs of repairs, upgrades, cleanup and the money spent while owning the property. In some areas home prices have increased so much that there is little or no profit available to flip it."

"The Reno-Sparks area was one of the first to see an increase in distressed sales and like many of our sister markets we are one of the first out. The 32 percent decline in flipped homes in the last year is likely due to the decrease in distressed sales and it's actually a positive sign of the housing recovery we are experiencing," said Craig King, COO at Chase International brokerage serving the Reno and Lake Tahoe markets. "While there will always be a market for sharp home flippers our marketplace numbers indicate that home flipping here is back to a place best left to the professionals."

"Many investors who buy homes to flip have holding restrictions placed on them, so they rent the property with the idea that after a few years they'll put it on the market and sell it," said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty in Oklahoma City and Tulsa. "There is a pronounced reluctance from these investors to sell now because rental rates are skyrocketing, especially in Oklahoma City due to the tornado, and we are experiencing a 10 percent appreciation on home values. Many investors who may have intended to flip properties are not putting them back on the market because they can rent the property for a profit while it continues to appreciate."


Top 15 Markets for Profitable Home Flipping---------------------------------------------------------------------------- Single Family Flips YoY Avg Avg Gross AvgMetro Area First Pct Purchase Gross Profit Purchase Half Change Price Profit Pct Discount 2013----------------------------------------------------------------------------Deltona-Daytona Beach-Ormond Beach, FL 729 111% $62,826 $51,657 82% -38%----------------------------------------------------------------------------Omaha-Council Bluffs, NE-IA 2,662 329% $153,617 $85,537 56% -4%----------------------------------------------------------------------------Palm Coast, FL 528 267% $127,896 $43,721 34% -11%----------------------------------------------------------------------------Pittsburgh, PA 617 79% $114,355 $36,537 32% -28%----------------------------------------------------------------------------Tampa-St. Petersburg-Clearwater, FL 2,673 32% $102,193 $23,446 23% -17%----------------------------------------------------------------------------Port St. Lucie, FL 1,001 105% $105,824 $18,433 17% -5%----------------------------------------------------------------------------Cape Coral-Fort Myers, FL 1,401 14% $134,644 $22,524 17% -11%----------------------------------------------------------------------------Jacksonville, FL 1,823 260% $133,968 $21,326 16% -8%----------------------------------------------------------------------------Charleston-NorthCharleston, SC 551 97% $229,813 $29,850 13% -14%----------------------------------------------------------------------------Virginia Beach-Norfolk-Newport News, VA-NC 542 14% $206,765 $26,565 13% -12%----------------------------------------------------------------------------Chicago-Naperville-Joliet,IL-IN-WI 2,845 86% $195,360 $23,099 12% -8%----------------------------------------------------------------------------Washington-Arlington-Alexandria, DC-VA-MD-WV 3,169 108% $403,441 $46,205 11% -4%----------------------------------------------------------------------------Cincinnati-Middletown, OH-KY-IN 1,191 85% $123,938 $13,996 11% -10%----------------------------------------------------------------------------New York-Northern NewJersey-Long Island, NY-NJ- 5,485 437% $376,224 $39,458 10% -3%PA----------------------------------------------------------------------------Orlando-Kissimmee, FL 2,417 75% $141,192 $14,394 10% -4%----------------------------------------------------------------------------




Report methodology
RealtyTrac analyzed sales deed data and automated valuation data for this report. A single family home flip was any transaction that occurred in the first half of the year where a previous sale on the same property had occurred within the last six months. RealtyTrac analyzed only metro areas with at least 200 sales in the first half of the year. To determine the top 15 markets for profitable flipping, RealtyTrac narrowed the metro list to only those with at least 500 flips in the first half of the year and where flipping had increased 10 percent or more from the previous year and where the gross profit percent was at least 10 percent. The top 15 list was then sorted by gross profit percent, from greatest to least.


U.S. and State Totals for Home Flipping---------------------------------------------------------------------------- Single Family YoY Avg Avg Gross AvgState Flips First PCt Purchase Gross Profit Purchase Half 2013 Change Price* Profit Pct Discount----------------------------------------------------------------------------U.S. Totals 136,184 19% $200,942 $18,391 9% -5%----------------------------------------------------------------------------Alabama 1,644 45% $133,441 -$24,804 -19% 4%----------------------------------------------------------------------------Alaska 45 2% -- -- -- ------------------------------------------------------------------------------Arizona 6,554 -33% $172,561 $22,692 13% -4%----------------------------------------------------------------------------Arkansas 923 256% $144,822 $9,855 7% -5%----------------------------------------------------------------------------California 18,407 -19% $291,516 $39,359 14% -1%----------------------------------------------------------------------------Colorado 2,634 -2% $189,636 $31,896 17% -11%----------------------------------------------------------------------------Connecticut 212 16% $217,885 $30,935 14% -13%----------------------------------------------------------------------------Delaware 461 36% -- -- -- ------------------------------------------------------------------------------District of Columbia 57 0% $238,298 $191,103 80% -28%----------------------------------------------------------------------------Florida 17,707 48% $121,243 $30,861 25% -16%----------------------------------------------------------------------------Georgia 7,788 -20% $176,358 -$9,789 -6% 0%----------------------------------------------------------------------------Hawaii 35 -54% $482,018 $97,120 20% -16%----------------------------------------------------------------------------Idaho 414 -32% -- -- -- ------------------------------------------------------------------------------Illinois 3,903 161% $169,556 $21,678 13% -5%----------------------------------------------------------------------------Indiana 1,416 -24% -- -- -- ------------------------------------------------------------------------------Iowa 733 36% $119,299 -$1,402 -1% -10%----------------------------------------------------------------------------Kansas 73 24% -- -- -- ------------------------------------------------------------------------------Kentucky 353 -47% $101,907 $12,082 12% -20%----------------------------------------------------------------------------Louisiana 1,548 142% $145,950 $13,599 9% -9%----------------------------------------------------------------------------Maine 9 0% -- -- -- ------------------------------------------------------------------------------Maryland 3,375 104% $247,073 $22,321 9% -4%----------------------------------------------------------------------------Massachusetts 593 -36% $289,029 -$8,661 -3% 5%----------------------------------------------------------------------------Michigan 6,458 147% $147,719 -$6,504 -4% 1%----------------------------------------------------------------------------Minnesota 2,485 208% $183,235 $12,409 7% -4%----------------------------------------------------------------------------Mississippi 21 -86% -- -- -- ------------------------------------------------------------------------------Missouri 2,391 -26% -- -- -- ------------------------------------------------------------------------------Montana 56 -65% -- -- -- ------------------------------------------------------------------------------Nebraska 2,700 262% $150,570 $93,869 62% -5%----------------------------------------------------------------------------Nevada 2,923 -34% $162,695 $15,205 9% 9%----------------------------------------------------------------------------New Hampshire 325 -14% $162,472 -$19,297 -12% -20%----------------------------------------------------------------------------New Jersey 3,457 383% $328,654 $39,428 12% -6%----------------------------------------------------------------------------New Mexico 100 -52% -- -- -- ------------------------------------------------------------------------------New York 4,911 402% $325,494 $21,728 7% -1%----------------------------------------------------------------------------North Carolina 4,617 8% $175,922 -$16,838 -10% 0%----------------------------------------------------------------------------North Dakota 178 134% -- -- -- ------------------------------------------------------------------------------Ohio 4,427 49% $109,344 $6,607 6% -13%----------------------------------------------------------------------------Oklahoma 895 -20% $109,605 $38,668 35% -12%----------------------------------------------------------------------------Oregon 949 -47% $187,391 $37,410 20% -11%----------------------------------------------------------------------------Pennsylvania 3,021 119% $133,071 $41,170 31% -26%----------------------------------------------------------------------------Rhode Island 163 -19% $170,686 $4,940 3% -16%----------------------------------------------------------------------------South Carolina 2,639 56% $154,868 $19,087 12% -18%----------------------------------------------------------------------------South Dakota 4 -- $123,006 -$27,256 -22% -1%----------------------------------------------------------------------------Tennessee 4,220 4% $117,142 -$6,618 -6% -8%----------------------------------------------------------------------------Texas 5,853 -12% $98,267 $17,854 18% -1%----------------------------------------------------------------------------Utah 447 -62% $121,207 $28,521 24% -23%----------------------------------------------------------------------------Vermont 123 339% $164,006 -$2,454 -1% 4%----------------------------------------------------------------------------Virginia 5,306 135% $326,333 $23,170 7% -2%----------------------------------------------------------------------------Washington 3,281 22% $205,674 $19,248 9% -6%----------------------------------------------------------------------------West Virginia 394 1171% $188,074 -$3,292 -2% 3%----------------------------------------------------------------------------Wisconsin 2,247 136% $154,008 $2,824 2% -4%----------------------------------------------------------------------------Wyoming 64 60% -- -- -- ------------------------------------------------------------------------------




*Average price information not available in all markets

Data Licensing and Custom Report Order
Investors, businesses and government institutions can contact RealtyTrac to license bulk foreclosure and neighborhood data or purchase customized reports. For more information contact our Data Licensing Department at 800.462.5193 or datasales@realtytrac.com.

About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the leading supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts®. RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters