Flipping Homes: Median Gross Profit Per Flip Hits Post-Crisis High

Flipping properties, which was the craze before the housing crash of 2007-2008, has not exactly made a comeback.

But the median gross profit per flipped property is $56,000 — that’s about 17 percent higher than its peak value of $48,000 in the third quarter of 2005, according to an update on flipping activity from CoreLogic.
Flipping is when an investor purchases a property, repairs and renovates it, and then re-sells it within a short period of time for a profit. The faster and cheaper the renovation work, the higher the profit potential. But much also depends on the price paid for the property and home prices in the respective neighborhood. Flipping was at an all-time high before the housing market collapsed mostly because of easy access to credit and unrestrained speculation when it came to home resale prices
Overall, the current data on flipping is mixed. Nationwide, the ratio of homes that are flipped among all home sales is at 4.4 percent as of the first quarter of 2016, which is well below its peak value of 6.4 percent in Q1 2005, says CoreLogic.
Meanwhile, the median percentage gross profit has declined to 41.1 percent since its peak value of 47.7 percent in 2009. The decline of the percentage profit might be the result of the decline of the share of distressed sales.
It’s takes slightly longer to flip a property now, compared to the days before the housing crisis. Prior to the crisis, the peak average time to flip a property was 150 days in the second quarter of 2006. Now, it takes 154 days on average to flip a property and this trend appears to be still trending upward, CoreLogic projects.

House flipping

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