The Flipping Dip in the DC Area

• December 16th 2021

by Nena Perry-Brown

As home flipping rates start ticking up in the U.S., the opposite phenomenon has taken hold in the DC area.

111 homes were flipped in DC during the third quarter of 2021, according to the latest ATTOM flipping report, a 28% drop compared to the third quarter of 2020. Average gross profit and gross return on investment (ROI) also fell, from $245,000 to $164,000 and from 67.1% to 33.8%, respectively. 

There were only three zip codes in DC where there were at least 10 homes flipped in the third quarter: 20002, 20011, and 20019. The 20011 zip code (Brightwood, Crestwood, Petworth, Fort Totten) led the way with 21 flips, grossing the highest profit ($362,000) and ROI (68.7%) of the aforementioned zip codes.

The 20019 zip code (Deanwood, Marshall Heights, Benning Ridge) is tied in second place with 19 flips, and the $216,500 in gross profit yielded a 67% gross ROI. In the 20002 zip code (Eckington, Ivy City, northeast Capitol Hill), the 19 homes flipped represented 6.4% of those sold during the quarter, and the margins were much slimmer, with an average gross profit of $186,660 and gross ROI of 36.7%.

Flips also went down in Maryland, with the 1,436 units flipped constituting a 16% drop in the third quarter. Within the Beltway, the 20743 zip code (Seat Pleasant, Capitol Heights, Walker Mill) had the most flips (18), grossing an impressive ROI of 94.4%. In Virginia, flips only fell slightly year-over-year, with the 2,200 units flipped only down 2% from the third quarter of 2020. Interestingly, the 10 homes flipped in the 22304 zip code of Alexandria (Landmark, Seminary Hill) during the third quarter grossed an average profit of $0, purchased and sold for a median price of $280,000. 

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The report identifies flips as the same property selling twice within 12 months. Gross profit is calculated as the difference between the original purchase price and the second sales price, and ROI is gross profit divided by original purchase price. Rehabilitation costs and associated expenses are typically 20-33% of home value after repair.

Photo courtesy of HomeVisit.

This article originally published at https://dc.urbanturf.com/articles/blog/flipping-takes-another-dip-in-the-dc-area/19071.