Editor’s note: This article was first published in March 2021 and reflects market conditions at that time.
House flipping gets plenty of attention on television, where a run-down property becomes a desirable home in under an hour. In 2020 and early 2021, the numbers behind the business were getting attention too.
Flips reached a 14-year high
According to a home flipping report from property data provider ATTOM Data Solutions, 53,705 single-family homes and condominiums were flipped in the United States in the first quarter of 2020. That was 6.3 percent more than a year earlier, and the highest count since the second quarter of 2006.
Profits were up as well. The report found that the average gross profit on a flip had passed $60,000.
Where flipping grew fastest
The report listed several places where flipping activity rose the most, among them the Boston and Springfield areas of Massachusetts, along with parts of Washington, Pennsylvania and Minnesota.
New construction rose at the same time
Builders were busy too. As we noted in New Construction Hits All-Time High, the U.S. Census Bureau reported a 5.8% monthly increase in housing starts in December 2020, and construction spending rose another 1.7 percent in January 2021 to $1.521 trillion.
What it means for investors now
Markets have changed since these figures were published, and they’ll keep changing. The basics of a good flip haven’t. Buy at the right price, control renovation costs and know what the finished house will sell for. Our rules for flipping a house and fix and flip tips for new investors cover those basics.
If you’re planning a project, see Sachem Lending’s fix and flip loans or fill out a loan application.
