Home flipping profits rise nationwide but drop in R.I., Mass.

House flipping for single-family homes continued to rise nationwide during the first half of 2013, as flipping profits for real estate investors shot up nearly 250 percent year over year, according to a report by online real estate marketplace RealtyTrac. More

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Home flipping profits rise nationwide but drop in R.I., Mass.

BLOOMBERG FILE PHOTO/TY WRIGHT
AS NATIONAL profits from house flipping rose nearly 250 percent year over year, profits fell in both Rhode Island and Massachusetts from 2012 to 2013.
Posted 7/22/13

IRVINE, Calif. – House flipping for single-family homes continued to rise nationwide during the first half of 2013, as flipping profits for real estate investors shot up nearly 250 percent year over year, according to a report by online real estate marketplace RealtyTrac.

Investors flipped 136,184 single-family homes from January to June, a 19 percent year-to-year increase and 74 percent higher than the same period in 2011. And they earned an average gross profit of $18,391 — a 9 percent return on the initial price and a 246 percent rise from the first half of 2012, when the average profit was $5,321.

The profit margin represented a stark change from two years ago, when investors on average lost more than $13,000 on flipping a house.

In 2013, house flippers on average bought homes for 5 percent below market value and sold them for 1 percent above market value.

But in Rhode Island, the first half of 2013 saw investors flip 163 single-family houses, a 19 percent year-to-year decrease. Investors made an average profit of $4,940 and a 3 percent return on investment, both well below the national average.

Massachusetts had an even less hospitable climate for flipping: Investors flipped 593 houses from January to June, down 36 percent from 2012, and on average lost $8,661, amounting to a 3 percent gross loss percentage.

“While flipping continues to be profitable in most markets, particularly those where the home price recovery is still nascent and a recent rebound in foreclosure activity allows investors to find distressed inventory at a discount, home flipping is tapering off in markets where fewer of those distressed bargains are available,” Daren Blomquist, vice president at RealtyTrac, said in a statement. 32 of the 100 markets RealtyTrac analyzed had declines in flipping during the first half of 2013.

Nationwide, the most profitable real estate markets for house flipping were Deltona-Daytona Beach-Ormond Beach, Fla.; Omaha-Council Bluffs, Neb.-Iowa; Palm Coast, Fla.; Pittsburgh, Pa.; and Tampa-St. Petersburg-Clearwater, Fla.

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