Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 101 NUMBER 4 ■ MECKTIMES.COM
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Home Flipping Profit Margins Drop Again Across U.S.
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ATTOM has released its third-quarter 2021 U.S. Home Flipping Report showing that 94,766 single-family houses and condominiums in the United States were flipped in the third quarter. Those transactions represented 5.7 percent of all home sales in the third quarter of 2021, or one in 18 transactions, a figure that was up for the second quarter in a row after a year of declines. The latest total marked an increase from 5.1 percent, or one in every 20 home sales in the nation, during the second quarter of 2021, and from 5.2 percent, or, or one in 19 sales, in the third quarter of last year. But the report also shows that typical raw profits remained below where they
were a year ago and, more importantly, profit margins dipped to their lowest point since early 2011. Among all flips nationwide, the gross profit on typical transactions (the difference between the median sales price and the median paid by investors) stood at $68,847 in the third quarter of 2021. While that was up 2.7 percent from $67,008 in the second quarter of 2021, it was 1.6 percent less than the $70,000 level recorded in the third quarter of 2020. Profit margins, meanwhile went down for the fourth quarter in a row, as the typical gross-flipping profit of $68,847 in the third quarter of 2021 translated into just
a 32.3 percent return on investment compared to the original acquisition price. The national gross-flipping ROI was down from 33.2 percent in the second quarter of 2021 and from 43.8 percent a year earlier, to its lowest point since the first quarter of 2011. The decrease in the typical profit margin from the third quarter of last year to the same period this year was the largest annual drop since early in 2009, when the housing market was crashing from the effects of the Great Recession. Profit margins declined in the third quarter of 2021 as prices on flipped homes
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“The journey toward homeownership – whatever your timeline – actually begins with your first banking experience and continues as you learn to budget, save and establish a solid credit history,” AJ Barkley, Bank of America
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