The House Flippers Are Back—-But Now Flipping Fewer, Mostly To Each Other, At $55K Profit Per Pop

Contra Corner reports:

Overnight, RealtyTrac released its latest home-flipping report. What it found is that while the latest housing bubble may have indeed popped, manifesting itself not only in a decline in flipping prices but also a tumble in flipping activity across the US as a percentage of all sales from 6.5% a year ago to just 3.7% in Q1, and down from 4.1% last quarter, flipping, where a home is purchased and subsequently sold again within six months, can still be massively profitable, leading to returns that would make the pimpliest 25-year-old, math PhD HFT-firm owner green with envy.

Among the core findings was that the average sales price of single family homes flipped in the first quarter was $55,574 higher than the average original purchase price. That gross profit provided flippers with an unadjusted ROI (return on investment) of 30 percent of the average original purchase price averaged out across the US. The average gross profit per flip a year ago was $51,805 for an unadjusted ROI of 28 percent. However, it is the range that is notable: the flip ROI ranged from -8%, or a loss of $10k on the property, to a gain of 80%, a whopping $144K!

What is just as notable is that while flipping across the US is moderating, in some states it is as high as 12% of all sales activity. And just as notable, in the first quarter a whopping 43% of all flipping sales were to an all-cash buyer – in other words, flipping to other flippers!

Where would house flippers be without the Fed and artificially low interest rates?