RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Year-End and Q4 2015 U.S. Home Flipping Report, which shows that 179,778 U.S. single family homes and condos were flipped in 2015, 5.5 percent of all single family home and condo sales during the year.
The 5.5 percent share of U.S. home flips in 2015 was up from a 5.3 percent share in 2014, marking the first annual increase in the share of homes flipped following four consecutive years of decreases. The share of homes flipped in 2015 increased from the previous year in 83 of 110 U.S. metropolitan statistical areas nationwide analyzed for the report (75 percent).
For the report, a home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by RealtyTrac in more than 950 counties accounting for more than 80 percent of the U.S. population (see full methodology below).
“As confidence in the housing recovery spreads, more real estate investors and would-be real estate investors are hopping on the home flipping bandwagon,” said Daren Blomquist, senior vice president at RealtyTrac. “Not only is the share of home flips on the rise again, but we also see the flipping trend trickling down to smaller investors who are completing fewer flips per year. The total number of investors who completed at least one flip in 2015 was at the highest level since 2007, and the number of flips per investor was at the lowest level since 2008.”
There were 110,008 investors or entities that completed at least one home flip in 2015, the highest number of home flippers since 2007, when there were 130,603 home flippers. The peak in the number of active home flippers was in 2005, with 259,192. There were 1.63 home flips per investor in 2015, the lowest ratio of flips per investor since 2008.
“More inexperienced home flippers with a smaller financial cushion could be a sign of an over-speculative market, but the data indicates that flippers in 2015 continued to operate within relatively conservative margins,” Blomquist continued. “Homes flipped in 2015 were on average purchased at a 26 percent discount below estimated market value and re-sold by the flipper at a 5 percent premium above estimated market value.” (continue reading)