A total of 45,901 single-family homes and condos were flipped across the county in the third quarter of 2018, down 12% year over year from the third quarter of 2017. This marks the lowest number of homes flipped in a given quarter since the first quarter of 2015, according to ATTOM Data Solutions.
At the same time, flipped homes represented 5% of all home sales in the third quarter – the lowest number since 2016. Some analysts, including ATTOM’s Daren Blomquist, believe that this drop in activity serves as a “canary in the coal mine” for a cooling housing market.
In some parts of the country, decreased demand on the part of home buyers has caused home price growth to slow dramatically, which could be an indication of falling prices down the pike. The potential for a recession in the years ahead further complicates the outlook for the housing market.
One major contributing factor driving the latest slowdown is the declining return on investment for home flippers. The average gross flipping profit in third quarter was $63,000, or 42.6% ROI, representing the lowest return since 2012. Moreover, a third of home flips sold for between $100,000 and $200,000 — and those properties on average generated only a 39% gross return.
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