The Sarasota-Manatee region ranked 14th among major US metro areas in 2015 for home flips as a percentage of all home sales. (4 percent); and Cleveland (3 percent). Correct: In the San Jose and San Francisco metropolitan areas, where flippers averaged $145,000 per flip, topping the list of 110 metro markets studied.
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Even with values inching higher, flippers in South Florida a year ago bought properties at a median price of $124,000, roughly 24 percent below market value, RealtyTrac said.
“That’s a big take-home”, said Daren Blomquist, senior vice president at RealtyTrac, the real estate information company that crunched the numbers.
More troubling, three metro areas in Florida – the epicenter of the foreclosure crisis – saw the biggest year-over-year increase in flips: Lakeland, Jacksonville and Homosassa Springs were up 40 percent to 50 percent, the report showed. Third place went to NY with $120,000, while South Florida came in low with only $59,700 average gross profit for a flip.
In California, 6.5 percent of all home sales in 2015 were flips; an annual drop of 14 percent. “The share of flips is down 13 percent year over year in Sacramento”. The Bay Area’s high housing costs and supertight inventory make it “hard to flip in those markets”, he said.
Home flipping was higher in 11 percent of the 110 markets analyzed in the report, including Pittsburgh (19 percent above 2005 levels); Memphis (18 percent); Buffalo (12 percent); San Diego (4 percent); Seattle (4 percent); Birmingham, Ala.
The average gross flipping profit of $55,000 in 2015 represented an average gross return on investment (ROI) of 45.8 percent, up from 44.2 percent in 2014 and up from a 35.3 percent in 2005.
“In Sacramento that discount is only 17 percent, which is still a discount”, says Blomquist. Average gross profit was calculated by subtracting the average price for the first sale (purchase) from the average price of the second sale (flip).
RealtyTrac, a housing research firm in Irvine, Calif., considers a home flipped if it sells twice within 12 months.
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RealtyTrac is a leading provider of comprehensive USA housing and property data, including nationwide parcel-level records for more than 130 million US properties.
