Report finds mixed results for home flipping in metro Phoenix
PHOENIX – For metro Phoenix real estate investors, home flipping has been more about speed than profit.
The Valley has one of the nation’s fastest average turnaround times for flipped homes but one of the lowest returns on investment, according to the latest data.
Phoenix-area homes were flipped in an average of 151 days, the fifth fastest in the U.S., according to an ATTOM Data Solutions report released earlier this month on homes resold within a year of purchase during the second quarter of 2019.
However, the return on investment on Valley flips was just 15.3%, the fourth-lowest figure in the country among the 149 metro areas in the report.
Nationally, it took an average of 184 days to flip a home in the second quarter of 2019. The average rate of return on those sales was 39.9%.
The rate of return for homes flipped has been on the decline nationally for the last couple of years.
The percentage has dropped for six consecutive quarters and eight of the last 10 quarters to its lowest level since the fourth quarter of 2011.
“Home flipping keeps getting less and less profitable, which is another marker that the post-recession housing boom is softening or may be coming to an end,” Todd Teta, chief product officer at ATTOM Data Solutions, said in the report.
“Flipping houses is still a good business to be in and profits are healthy in most parts of the country. But push-and-pull forces in the housing market appear to be working less and less in investors’ favor.”
While the total number of homes flipped in the U.S. was up 12.4% in the second quarter from the first quarter of 2019, it was down 5.2% from the second quarter of 2018.