ATTOM Data Solutions Q2 2019 U.S. Home Flipping Report, out Thursday, shows that 59,876 U.S. single family homes and condos were flipped in the second quarter of 2019, up 12.4% from the previous quarter, but down 5.2% from a year ago.
The homes flipped in the second quarter represented 5.9% of all home sales during the quarter, down from a post-recession high of 7.2% in the previous quarter, but up from 5.4% a year ago.
Homes flipped in Q2 2019 typically generated a gross profit of $62,700 (the difference between the median sale price and median paid by investors), up 2% from the previous quarter, but down 2% from a year ago.
The typical gross flipping profit of $62,700 in Q2 2019 translated into a 39.9% return on investment compared to the original acquisition price, down from a 40.9% gross flipping ROI in Q1 2019 and from a margin of 44.4% in Q2 2018. Returns on home flips have dropped six quarters in a row and eight of the last 10, now standing at the lowest level since Q4 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," said Todd Teta, chief product officer at ATTOM Data Solutions. "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. That's leading to declining profits and a business that is nowhere near as good as it was a few years ago."