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March 3, 2016, 6:50 a.m. EST

Home flipping up as profits hit a 10-year high, RealtyTrac says

The share of homes flipped rose after four straight yearly declines

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By Andrea Riquier


Shutterstock.com
Home flipping made good profits for small investors in 2015

The average gross profit from flipping homes hit a 10-year high of $55,000 in 2015, RealtyTrac said Thursday. That represented a return on investment of 45.8%, up from 44.2% in 2014 and 35.3% in 2005

RealtyTrac defines flipping as selling a property more than once within a 12-month time period to a buyer other than a family member.

2015 was also notable for being the first year in which flip’s share of total home sales rose after four straight years of declines . Flips made up 5.5% of total sales, up from 5.3% in 2014.

States with highest share of flips, 2015 Share of all sales
Nevada 8.8%
Florida 8.0%
Alabama 7.4%
Arizona 7.1%
Tennessee 6.9%

The total number of investors completing a flip, 110,008, was the highest since 2007. Even so, the average number of flips per investor, 1.63, was at the lowest since 2008, signaling a bigger showing of smaller investors.

That shows a rising sense of confidence in the housing market, RealtyTrac Vice President Daren Blomquist said in a release. While a rise in home flippers with smaller financial cushions could point to an over-speculative market, that wasn’t the case in 2015.

“Homes flipped in 2015 were on average purchased at a 26% discount below estimated market value and re-sold by the flipper at a 5% premium above estimated market value,” the release said.

Metro areas Gross ROI
Pittsburgh 129.5%
New Orleans 99.2%
Philadelphia 98.4%
Cincinnati 89.7%
New Haven, Conn. 89.6%

Andrea Riquier reports on housing from the Washington bureau of MarketWatch. Follow her on Twitter @ARiquier.

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