Redfin Report: Gains on Home Flips Reach All-Time High

Flips Saw an Average Increase of $102,400 from Purchase to Sale Price; Overall Flipping Activity on the Decline; Neighborhoods in Washington, D.C. and Los Angeles among the Hottest for Flipping

SEATTLE--()--Home flippers realized more gains on their flips in 2015 than ever before: $102,400 per flip on average, up from $98,500 in 2014 and far higher than the peak of $90,900 during the last housing boom. Redfin (www.redfin.com), the next-generation real estate brokerage, crunched the numbers all the way back to 2001 to see how flippers fared before and after the housing bust. Redfin also released a ranking of the country’s 10 hottest neighborhoods for flipping gains, led by Petworth in Washington, D.C and Mount Washington in Los Angeles. For its analysis, Redfin defined a flip as a home that was purchased and then sold again within 12 months for at least 10 percent more than the original purchase price.

While big gains in home prices have created big opportunities for flippers in 2015, the number of homes being flipped was relatively low. We estimate 43,000 homes were flipped in 28 Redfin markets last year, nowhere near the volume of 2005, which was the peak year on record at 95,000 homes.

Market and Neighborhood Highlights:

  • The hottest neighborhoods for flips, based on average gains were Petworth in Washington, D.C. ($337,000) and Mount Washington ($312,000) and Silver Lake ($307,000), both in Los Angeles.
  • Rounding out the top-five hottest neighborhoods were Brookland in Washington, D.C. ($290,000) and North Sunnyvale in San Jose ($268,000).
  • Among metros areas, San Francisco was the most lucrative flipping market in 2015, with an average gain of $216,000 per home, followed by San Jose ($174,800) and Long Island ($152,600).
  • The smallest flipping gains in 2015 were seen in Las Vegas ($53,600) Atlanta ($68,500) per home, and Raleigh-Durham ($71,400).
  • When calculating the average gain compared to the original purchase price, flippers in Philadelphia, Chicago and Baltimore fared well. Gains in those cities were 73%, 70% and 67% higher than the original purchase price.

To read the full report, complete with charts and market breakdowns, please visit: https://www.redfin.com/blog/2016/03/whats-the-flipping-deal.html

For a ranking of the top 10 hottest neighborhoods for flipping, please visit: https://www.redfin.com/blog/2016/03/which-neighborhoods-are-hottest-for-home-flips.html

Methodology

For this analysis, Redfin defined a flip as any home (condos, townhomes, or single-family units) that was bought and resold between a three to 12-month period, for at least 10 percent more than the original purchase price. This was to filter out sales that do not appear to be intentional flips, which typically involve some investment. While a homeowner may buy and resell a property in a short time span for other reasons, we can assume that the majority of fast sales that are resold for a 10 percent gain were intentional flips.

The analysis looked at flipping activity in 28 markets across the country. We excluded homes that were acquired and resold by banks as those tend to be foreclosed properties, as well as homes below $20,000 or over $1.2 million. Redfin used county recorder data from CoreLogic from January 2001 through August 2015 and sales data from the multiple listing service through December 2015. We estimated flipping activity from September through December 2015 based on the first eight months of the year and annual changes.

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About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the customer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the industry’s most accurate home-value estimate, the Redfin Estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commission. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales, and saved customers more than $335 million in fees, and counting.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center.

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Contacts

Redfin Journalist Services:
Alina Ptaszynski, 206-588-6863
press@redfin.com

Contacts

Redfin Journalist Services:
Alina Ptaszynski, 206-588-6863
press@redfin.com