Home Flipping Rate & Profits Fall in Q1

The rate of home flipping fell in the first quarter of 2021, according to ATTOM data solutions quarterly Home Flipping report (ATTOM)

• Just 32,526 single-family homes and condominiums were flipped in Q1. This represents just 2.7% of all home sales or one in 37 transactions. This is the lowest level since 2000.

• This is down from 4.8% in Q4 2020 and down from the 7.5% we saw in the first quarter of last year.

Flipping profits and profit margins also fell in the first quarter of 2021…

• The gross profit on the typical home flip nationwide declined to $63,500. This is down from $71,000 in Q4 2020 but is up slightly from the $62,000 we saw at the same time a year ago.

• The typical gross flipping profit translated to a 37.8% return on investment, which is down from 41.8%t in Q4 of 2020 and is also down from the 38.8% we saw at the same time a year ago.

Todd Teta, chief product officer at ATTOM, said in a statement, “It’s too early to say for sure whether home flippers indeed have gone into an extended holding pattern. But the first quarter of 2021 certainly marked a notable downturn for the flipping industry, with the big drop in activity suggesting that investors may be worried that prices have simply gone up too high,”

BOTTOM LINE: It’s hard to flip homes when inventory levels are at historic lows and prices are at all-time highs.