Typical profits for investors flipping homes have hit a 13-year low. But the DC region ranks high for return on investment compared with other areas.
Typical profits for investors buying a home, renovating it, and reselling a home — or flipping it — have hit a 13-year low. But the DC region ranks high for return on investment.
Real estate data firm Attom Data Solutions reports 7.5% of homes purchased in the third quarter nationwide were flips, or one in 13 transactions. That was down 8.2% from the second quarter, though still 5.9% more than the third quarter of 2021. Notably, despite the recent decline in flips, the rate during the third quarter was the third-highest in the past decade.
The DC metro area ranked fourth for gross profits on a median-priced home flip last quarter, at $140,000. Baltimore ranked just behind DC, at $135,000. Salisbury, Maryland, topped the list, with a typical gross profit of almost $199,000.
Baltimore also ranked second-highest among metro areas for percentage return on investment, at 75%, topped only by Philadelphia, at 77.5%.
Nationwide, the typical gross profit return on a flipped home fell to $62,000 in the third quarter, or a 25% return on investment.
Market conditions may continue to weigh on investors.
“It is apparent that fix-and-flip investors aren’t immune to the shifting conditions in the housing market,” said Rick Sharga, executive vice president of market intelligence at Attom.
“With demand from buyers weakening, prices trending down over the past few months, and financing rates significantly higher than they were at the beginning of the year, flippers face a much more difficult environment today, and probably will in 2023 as well.”
Phoenix had the largest share of sales that were flips in the third quarter, at 13.7% of all transactions. Atlanta was also a top flipping market for investors, at 12.9% of all third-quarter sales.