Investors’ new approach allows an increase in the rate of home flips in metro areas across the US
Changes in investor approach on home flips allow for historically fast turnover and increased home flipping returns.
Investors have been going about investing in home flips differently in recent years, according to a blog post by CoreLogic. Home-flipping activity, or the act of purchasing a property with the intent to sell in a short period of time for profit, has seen steady growth over the past eight years, with the fourth quarter of 2018 seeing a remarkable flipping rate in the US at 10.6%. This is the highest rate since 2002, which was the first time CoreLogic started tracking this market.
With these historic highs and healthy returns for investors, CoreLogic recognizes that the home-flipping business model is changing. “Flippers are increasingly good at acquiring properties at a discount, either because the properties were legally, financially or physically distressed,” said CoreLogic. “This suggests that flippers have shifted from speculating in the housing market to adding value, making flipping investments more sustainable in the long run.”
The fastest rates of flipping are found in the Sunbelt, largely the southern part of the US, while the northeast and parts of the Midwest saw the lowest rates, according to an article by Civic Financial.
The following metro areas saw the highest average flipping rates in the fourth quarter of 2018:
Birmingham, Ala. - 16.5%
Memphis, Tenn. - 16.2
Tampa, Fla. - 15.1%
Las Vegas, Nev. - 15%
Camden, N.J. - 14.9%
Palm Bay, Fla.- 14.1%
Philadelphia, Pa. - 14%
Lakeland, Fla. - 13.9%
Atlanta, Ga. - 13.8%
The lowest average flipping rates include the following areas:
Austin, Texas - 4.3%
Bridgeport, Conn. - 4.4%
Hartford, Conn. - 5.1%
New Haven, Conn. - 5.3%
Houston, Texas - 5.9%
Kenosha County, Wis. - 6.6%
Elgin, Ill. - 6.5%
Kansas City, Mo. - 6.5%
Pittsburgh, Pa. - 6.3%
