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Recovering prices helped short-term flippers earn an average gross profit of $54,927 on single family home flips in the third quarter, up 12 percent from a year ago.

Price Hikes Help High-End Flippers

Recovering prices helped short-term flippers earn an average gross profit of $54,927 on single family home flips in the third quarter, up 12 percent from a year ago.

RealtyTrac today reported that in the third quarter there were 32,993 single family home flips – where a home is purchased and subsequently sold again within six months – in the third quarter of 2013, down 35 percent from the second quarter and down 13 percent from the third quarter of 2012.

The higher gross profit was driven in part by an increase in high-end flips on homes that were sold by flippers for $750,000 or more. A total of 968 high-end homes nationwide were flipped in the third quarter, down 13 percent from the previous quarter but up 34 percent from a year ago. More than three-fourths of all high-end flips were in five markets: the New York metro area and four coastal California markets – Los Angeles, San Francisco, San Jose and San Diego. Flips on homes priced between $1 million and $2 million increased 42 percent year over year, while flips on homes priced between $2 million and $5 million increased 350 percent year over year.

“Increasing home prices over the past 18 months combined with decreasing foreclosures have created a market less favorable to the high quantity of middle- to low-end bread-and-butter flips that we saw late last year and early this year,” said Daren Blomquist, vice president at RealtyTrac. “But the sharp rise in high-end flipping indicates there is still good money to be made for flippers willing and able to take on the additional risk of buying and rehabbing more expensive homes. With that higher risk also comes the potential for higher reward. The average gross profit on each high-end flip equals more than four times the average gross profit on each flipped home in the lower price ranges.

The number of single family homes flipped in the third quarter decreased from the previous quarter and a year ago nationally, but flipping numbers were still up from a year ago in some markets such as Los Angeles (11 percent increase), New York (14 percent increase), Detroit (13 percent increase), Atlanta (32 percent increase), Las Vegas (9 percent increase) Chicago (28 percent increase) and Seattle (23 percent increase).

Meanwhile home flipping decreased substantially from a year ago in several former flipping hot spots such as Phoenix (37 percent decrease), Tampa (47 percent decrease), Orlando (28 percent decrease), and Stockton, Calif. (down 37 percent).

Top 15 Markets for Profitable Home Flipping

Metro Area Single Family Flips Q3 2012 Single Family Flips Q3 2013 QoQ Pct Change YoY Pct Change Avg Purchase Price Avg Flipped Price Avg Gross Profit
Los Angeles-Long Beach-Santa Ana, CA

1910

2116

-9%

11%

409,021

$513,975

$127,634

New York-Northern New Jersey-Long Island, NY-NJ-PA

1826

2075

-8%

14%

407,170

$428,023

$72,722

Las Vegas-Paradise, NV

714

780

-15%

9%

144,197

$190,910

$53,503

Chicago-Naperville-Joliet, IL-IN-WI*

440

562

-15%

28%

191,164

$249,799

$85,814

Seattle-Tacoma-Bellevue, WA

395

485

-32%

23%

227,478

$319,280

$97,002

Portland-Vancouver-Beaverton, OR-WA

356

414

-7%

16%

213,795

$288,315

$84,063

Baltimore-Towson, MD

270

287

-69%

6%

330,052

$353,421

$46,576

Milwaukee-Waukesha-West Allis, WI

178

203

53%

14%

188,143

$205,048

$35,378

Oxnard-Thousand Oaks-Ventura, CA

193

197

-8%

2%

406,685

$510,906

$143,578

Tucson, AZ

178

186

-23%

4%

129,944

$179,682

$51,396

Fresno, CA

124

182

-20%

47%

141,908

$192,585

$52,704

Reno-Sparks, NV

161

175

3%

9%

159,158

$208,138

$52,266

Deltona-Daytona Beach-Ormond Beach, FL

99

108

-18%

9%

76,221

$120,283

$45,321

Pittsburgh, PA

97

104

-31%

7%

44,487

$95,270

$59,342

Raleigh-Cary, NC

63

104

5%

65%

162,213

$202,606

$47,201

*Non-disclosure state where prices are not required to be disclosed on sales deed

U.S. and State Totals for Home Flipping

State Q3 2012 Q3 2013 QoQ %Change YoY %Change Avg Purchase Price Avg Flipped Price Avg Gross Profit
California

8,592

7,840

-24%

-9%

$311,335

$402,718

$104,029

Florida

4,706

3,769

-40%

-20%

$125,557

$166,045

$48,910

Arizona

3,470

2,340

-13%

-33%

$168,964

$217,602

$51,476

New York

1,495

2,038

-13%

36%

$398,459

$413,573

$55,100

Michigan

1,149

1,229

-56%

7%

$132,293

$140,231

$16,997

Virginia

1,241

1,204

-55%

-3%

$266,287

$272,064

$9,633

Georgia

830

1,148

-34%

38%

$157,344

$154,086

-$4,014

Colorado

1,437

1,034

-32%

-28%

$202,531

$261,703

$63,667

Wisconsin

773

1,033

26%

34%

$159,873

$167,221

$18,743

Nevada

1,029

1,014

-16%

-1%

$145,404

$192,375

$52,862

Minnesota

942

911

-48%

-3%

$190,975

$206,801

$31,207

Washington

718

895

-27%

25%

$193,534

$264,315

$80,597

North Carolina

733

838

-38%

14%

$160,061

$196,269

$49,823

Illinois

905

826

-34%

-9%

$166,199

$208,919

$70,857

Tennessee

843

745

-38%

-12%

$344,250

$136,778

-$222,718

Pennsylvania

760

716

-50%

-6%

$124,915

$158,983

$51,244

Ohio

861

655

-62%

-24%

$113,995

$131,926

$26,694

New Jersey

1,403

649

-29%

-54%

$267,966

$301,304

$81,338

Maryland

500

560

-56%

12%

$304,584

$347,879

$75,296

Oregon

481

466

2%

-3%

$202,610

$266,256

$75,661

Nebraska

865

455

-35%

-47%

$130,418

$149,690

$83,510

Alabama

196

446

-9%

128%

$147,125

$162,749

$21,844

South Carolina

456

293

-20%

-36%

$125,709

$158,982

$39,630

Oklahoma

407

248

-20%

-39%

$116,919

$156,268

$45,389

Texas*

437

240

-23%

-45%

$109,052

$133,424

$27,590

Kentucky

309

192

-5%

-38%

$113,277

$121,642

$11,472

Louisiana*

147

149

-74%

1%

$126,949

$173,241

$50,716

Iowa

110

149

-43%

35%

$127,045

$159,796

$37,830

Missouri*

60

133

-30%

122%

$105,766

$156,468

$54,824

Arkansas

119

101

-68%

-15%

$132,378

$157,455

$32,060

Indiana*

429

101

-60%

-76%

$136,780

$152,287

$21,456

Delaware

23

44

-83%

91%

$120,349

$184,130

$73,852

District of Columbia

39

42

-19%

8%

$335,054

$570,807

$260,569

West Virginia

92

38

-87%

-59%

$165,997

$167,971

$5,770

Utah*

6

28

100%

367%

$172,444

$232,939

$62,736

Idaho*

17

21

-42%

24%

$107,082

$150,381

$43,299

North Dakota*

7

13

333%

86%

$140,338

$198,092

$68,255

National

37,871

32,993

-35%

-13%

$219,412

$259,884

$54,927

*Non-disclosure state where prices are not required to be disclosed on sales deed

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