The surge in residential real estate, especially in suburban and rural markets, has given home flippers a big boost to their bottom lines. Inventory shortages are not only benefiting sellers in this market but those individuals who were able to purchase distressed properties at significant discount prices. According to the new ATTOM Data Solutions report, 57,155 single-family homes and condominiums were flipped in the third quarter of 2020, representing 5.1% of all home sales.
Despite the boom in the retail market, the number of home flippers represented in the total number of sales fell from 6.7% in the second quarter of 2020 and 5.5% in the third quarter of 2019.
In addition to the inventory shortage of homes available for sale, there are also significant shortages when it comes to the availability of skilled labor and material costs. Softwood lumber prices have skyrocketed by 40% since April of 2020.
According to the ATTOM report, the gross profit on a typical flip rose to $70,766, up from $69,000 in the second quarter of 2020 and $61,800 in the third quarter of last year.
This represents the highest average gross profit figure ever recorded by ATTOM since they began keeping track back in 2000.
Additionally, home flippers are most likely benefiting from the record low interest rates being charged currently by banks.
As it stands now, record pent-up buyer demand continues to push prices higher while inventories continue to diminish and low interest rates make buyers more willing to pay up.
The highest return on investment, according to the report, for home flipping was realized primarily in California with the exclusion of Bridgeport, Connecticut.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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