In 2021, Home Flipping Dropped Significantly in the DC Region
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While the rate of home flipping has been trending downward in the U.S. for about a year, DC had largely been bucking the trend — until now.
The ATTOM flipping report for the first quarter of 2021 shows that flips in DC fell 76% year-over-year. Only 47 houses were flipped in DC during the first quarter of the year, accounting for 2.3% of homes sold. For context, flips represented 7% of all homes sold in DC last year. The drop in flips in DC tracks with that observed nationwide, as the 2.7% flipping rate in the country was the lowest seen since 2000.
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“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,” Todd Teta, ATTOM's chief product officer, said in a statement.
Maryland and Virginia also witnessed a significant drop in flips.
In Virginia, flips represented 2.8% of homes sold during the first quarter of the year, a 61% drop year-over-year. In Maryland, 912 homes were flipped in the first quarter, a 57% decrease year-over-year. In both states, however, profits improved: For Virginia, gross profit rose from $94,000 to $98,000 and ROI rose from 63.1% to 71.5%; in Maryland, gross profit rose from $105,000 to $122,250, and gross ROI rose from 63.6% to 68.8%. In DC, ROI went down from 66.7% to 60% despite gross profit increasing in the city from $200,000 to $243,750.
The report uses sales data and identifies flips if the same property sells 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.
See other articles related to: attom data solutions, flipping, flipping homes, house flipping
This article originally published at https://dc.urbanturf.com/articles/blog/in-2021-home-flipping-has-dropped-significantly-in-the-dc-region/18394.
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