RealtyTrac hot and cold markets for home investment flippers

Nearly 180,000 U.S. single family homes and condos were flipped in the year 2015, which accounted for 5.5% of total sales of single family homes and condos, according to RealtyTrac. This is a 20-basis point increase compared to the 5.3% in 2014, marking the first annual increase in the share of flipped homes after four years of decreases.

We've said in this space that we believe a strong "lesson learned" factor in housing trends would translate into dominant "owner-occupier" and long-term investment attitudes in home transactions, vs. short-term gains on quick turnarounds. That said, during periods of relatively rapid price appreciation--which we've seen in many markets over the past 36 months--one would expect quick, tactical turnarounds on real estate among pros. So, the sequential increase in flip rates from 5.3% to 5.5% is understandable.

Overall, however, we still believe there'll be growing momentum among home buyers who plan to live in and invest in their homes over an extended period of time, rather than to see their home purchase as a quick investment vehicle. Here's RealtyTrac's analysis of its top line take-aways:

“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, in the report. “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.”

States with the highest rate of flips in 2015 were Nevada (8.8 percent); Florida (8.0 percent); Alabama (7.4 percent); Arizona (7.1 percent); and Tennessee (6.9 percent).

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