ATTOM data recently released its latest fix and flip data, covering the third quarter of 2023. We analyzed it for three key trends real estate investors need to know.
Flips Are Being Completed More Quickly
The average number of days to flip a house (from buying the home to selling it) was 161 days in the 3rd quarter of 2023. This is down a whopping 17 days since the previous quarter, and it is also the smallest timeframe in almost two years. This indicates that many of the delays that arose during the pandemic—notably permitting and construction material delays—are finally back to normal.
The time it takes from buying to selling a flip is always important to investors due to the various carrying costs they incur each month, so this is terrific news. This decrease also indicates a continued strong market for completed flips on a nationwide basis.
Flip Profits Increased for the 3rd Consecutive Quarter
The national average flip profit increased from $65,500 to $70,000 over the quarter. Perhaps more importantly, the gross profit percentage rose slightly from 29% to 29.8% on a national average.
Obviously, flips being more profitable is wonderful news for real estate investors. But it’s important to understand why this is happening. One big reason is that flipped homes were bought at a lower average price ($235,000) than the previous quarter ($242,000) once again. This indicates that investors continue to be able to find and create deals, while creating profit on the buy. In addition, the appeal of quick and hassle-free closings seems to be attractive to sellers in a tight market, giving flippers more inventory.
A majority of national metros (51%) saw profit margin increases over the previous quarter. The Midwest and Ohio reign among the Top 5 Markets overall, and once again a Georgia metro (this time Augusta) finds its way onto the list. The Top 5 markets (over 100,000 population) in terms of flips profit margins are:
- Akron, OH
- Flint, MI
- Canton, OH
- Augusta, GA
- York, PA
Smaller markets are not the only places showing significant flip profit margins. Among large markets with over 1 million in population, the state of Ohio has 2 more metros on this list, while fellow Rust Belt city Buffalo produced extraordinary results. Here are the top large markets with the biggest annual fix and flip profit margin increases:
- Birmingham: From 35.4% to 71.9%
- Buffalo: From 75.6% to 109.7%
- Cleveland: From 35.8% to 67%
- Cincinnati: From 33.5% to 55.3%
- Tulsa: From 32.3% to 53.8%
The Share of Flipped Homes Remains Historically High
At 7.2% of all home sales, the latest rate of flipped homes is still historically high. For more than 15 years before the pandemic, the flip rate was consistently lower than the current rate and often below 5%. This is a remarkable feat considering the fact that the available home inventory has been so low nationally.
Which metros were the hottest in flipping this last quarter? Along with Spartanburg, South Carolina, Georgia cities Atlanta and Macon return to the list of metros with the highest flip rate. Salisbury, Maryland, and Fayetteville, North Carolina, are newcomers to the Top 5.
- Macon, GA = 16.1% (3rd quarter in a row at 1st in national flip rate)
- Salisbury, MD = 14.1%
- Spartanburg, SC = 13.3%
- Atlanta, GA = 13.2%
- Fayetteville, NC = 12.8%
As the fix and flip market has thrived, Lima One Capital has served investors across the country with the most complete suite of fix and flip loans. Contact us today to finance your next flip.
Analysis by Dameion Kennedy of Lima One’s real estate market analysis research team.
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