U.S. home flipping is down in the first quarter of the year and so are profits for flippers in the Tampa Bay metropolitan area, according to a first-quarter report released by RealtyTrac today.
The RealtyTrac report shows 3.7 percent of all U.S. single family home sales were flips, compared with 6.5 percent at the same time in 2013. Flipping is when a house is purchased, then sold again within six months.
Flipping is also down from the fourth quarter of 2013, when it sat at 4.1 percent of all single family house sales.
Nationally, the average sale price for a flipped house in the first quarter was $55,574 higher than the average original purchase price, giving flippers a 30 percent return on investment.
In this region, which includes Tampa, St. Petersburg and Clearwater, the average purchase price for a flipped house was $141,650 and the average flipped price for the same house was just $125,394, an 11 percent loss on investment.
“Slower home price appreciation early this year in many of the most popular flipping markets put some investors in danger of flying too close to the sun,” said Daren Blomquist, vice president at RealtyTrac. “But investors appear to have recalibrated their flipping strategy, accounting for the slower home price appreciation even if that means fewer flips. This is another good sign that the housing recovery is behaving much more rationally than the last housing boom, which was built largely on unfounded speculation rather than fact-based calculations.”
Realtytrac has also created a YouTube video on house flipping.