RealtyTrac’s Q1 2016 U.S. Home Flipping Report shows that 6.6% of all single family home and condo sales in the first quarter of 2016 were flips. According to the report, this is a 20% increase from the previous quarter and up 3% from just a year ago.
Daren Blomquist, senior vice presidnet at RealtyTrac in a press release stated:
"The good news is that -- despite the 20 percent jump in the first quarter -- home flipping nationally is not far above its historic norm, and home flippers in most markets appear to be behaving rationally and responsibly. In the first quarter, 71 percent homes flipped were purchased by the home flipper with cash -- compared to only 37 percent who purchased with cash at the height of the flipping boom. Spending their own money rather than other people's money is keeping flippers conservative. On average they are buying the homes they flip at a 27 percent discount below full market value and selling them at a 6 percent premium above full market value, helping to deliver strong flipping returns on average.”
The report also found that profits from home flipping increased to a gross profit, on average, of $58,250 which is the highest average since Q4 of 2016— a more than 10-year high.
RealtyTrac gathered data using the following methodology by analyzing: "...sales deed data and automated valuation data for this report. A single family home or condo flip was any transaction that occurred in the quarter where a previous sale on the same property had occurred within the last 12 months. Average gross profit was calculated by subtracting the average price for the first sale (purchase) from the average price of the second sale (flip). Average gross return on investment was calculated by dividing the average gross profit by the first sale (purchase) price."
To view the full report, click below.