The first quarter of 2021 showed a steep decline in home flips, according to ATTOM Data’s 2021 U.S. Home Flipping Report. Of all single-family homes and condos in the U.S., only 32,526 were flipped in the first quarter—that’s just 2.7% of inventory, recording the lowest level since 2000.
The takeaway:
Only one in 37 transactions is a home flip, according to the report. Additionally, profit margins are becoming slimmer—down to an average of $63,500 in Q1 this year from $71,000 in the prior quarter.
What it means:
Rising home values amid a nationwide inventory shortage could be to blame, increasing the competition for investors looking to make a deal with wider profit margins and less risk.
“It’s too early to say for sure whether home flippers indeed have gone into an extended holding pattern. But the first quarter of 2021 certainly marked a notable downturn for the flipping industry, with the big drop in activity suggesting that investors may be worried that prices have simply gone up too high,” said Todd Teta, chief product officer at ATTOM. “After riding the housing boom along with others for years, they now might be having second thoughts. Whether this is the leading edge of a broader market downturn is little more than speculation. But ATTOM will be following all market measures very closely over the coming months to find out.”
