Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 52 ■ MECKTIMES.COM
Part of the
TUESDAY, DECEMBER 26, 2023
network
Is the deck stacked against renters? Yes…and here are eight reasons why you need expert guidance Page 2
Construction employment increases in 226 of 358 metro areas Page 3
Alliance Residential Company opens new Prose Rhyne in northwest Charlotte Page 4
MARGENAU: Will the Christmas Spirit rub off on disability haters? Page 5
GOLDMAN: Your office wedding Page 6
From New York to Tokyo, stock markets around the world have rallied in 2023 Page 7
Home flipping activity keeps falling while investor profits keep rising across U.S. ATTOM has released its third-quarter 2023 U.S. Home Flipping Report showing that 72,543 single-family homes and condominiums in the United States were flipped in the third quarter. Those transactions represented 7.2 percent, or one of every 14 home sales nationwide, during the months running from July through September of 2023. The latest portion was down from 7.9 percent of all home sales in the U.S. during the second quarter of 2023 and from 7.7 percent in the third quarter of last year. While the flipping rate remained historically high, it dropped for the second straight quarter, to the lowest point in two years. But even as flipping rates declined, the latest analysis also revealed that fortunes continued improving for home flippers during the third quarter in the form of rising profits. Investor returns increased for the third quarter in a row, rebounding from a slump that had slashed profit margins by nearly two-thirds from early-2021 to late-2022. Margins, along with raw profits, rose to the highest levels since the middle of last year. The typical third-quarter profit margin of 29.8 percent nationwide – based on the difference between the median purchase and median resale price for home flips - remained far below peaks hit in 2021. But it was up from 29 percent in the second quarter of 2023 and up seven percentage points from a low of 22.4 percent in the fourth quarter of last year.
Raw profits on typical flips around the country, meanwhile, increased to $70,000. That remained well down from a high of $110,000 reached in 2021. But it was up slightly from the second quarter of 2023 and was $15,000 more than last year’s low point. “The comeback for the home-flipping industry is looking more like a real trend than a temporary break in what had been a pretty bleak couple of years,” said Rob Barber, CEO for ATTOM. “For sure, investment returns still aren’t anywhere close to where they were a couple of years ago. The latest nationwide profit margin also remains barely within the spread that covers the usual holding costs on flips, with wide variations around the country. Nevertheless, home flippers continue to head back in the right direction.” Profits and profit margins again turned upward in the third quarter of 2023 as investors were able to benefit from shifts in prices that went in their favor from the time when they were buying their properties to the point at which they sold them. Specifically, the typical resale price on flipped homes decreased to $305,000 in the third quarter, a 1.5 percent decline from the second quarter of 2023. But that drop-off was not as much as a 2.1 percent dip in median prices that recent home flippers were commonly seeing when they were buying their properties. The smaller quarterly decline in resale prices led to the improvement in profits and profit margins.
Home flipping rates tick downward in three-quarters of nation
Home flips as a portion of all home sales decreased from the second quarter of 2023 to the third quarter of 2023 in 136 of the 183 metropolitan statistical areas around the U.S. with enough data to analyze (74 percent). Most of the declines were by less than two percentage points. (Metro areas were included if they had a population of 200,000 or more and at least 50 home flips in the third quarter of 2023.) Among those metros, the largest flipping rates during the third quarter of 2023 were in Macon, GA (flips comprised 16.1 percent of all home sales); Salisbury, MD (14.1 percent); Spartanburg, SC (13.3 percent); Atlanta, GA (13.2 percent) and Fayetteville, NC (12.8 percent). Aside from Atlanta, the largest flipping rates among metro areas with a population of more than 1 million were in Memphis, TN (12.5 percent); Jacksonville, FL (10.8 percent); Phoenix, AZ (10.4 percent) and Cincinnati, OH (10.2 percent). The smallest home-flipping rates among metro areas analyzed in the third quarter were in Seattle, WA (3.8 percent); Madison, WI (3.9 percent); Honolulu, HI (3.9 percent); Bridgeport, CT (4 percent) and Lansing, MI (4.1 percent).
PLEASE SEE HOME FLIPPING ON PAGE 3
“We are thrilled to introduce Charlotte residents to the Prose Brand by providing high-quality living experiences in a convenient location.” Donald Santos, Alliance Residential Company.
Story, page 4