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Local home flippers are out-earning their peers in other parts of the country, but their raw profits represent a much smaller share of their projects’ final sale prices.
According to an analysis of second-quarter data by real estate data firm ATTOM, Fairfield County saw some of the largest raw profits on median-priced home flips among major U.S. metro areas: over $120,000.
ATTOM defines a single-family home or condo flip as any arms-length transaction in the quarter where a previous one on the same property had occurred within the last 12 months.
But high gross profits don’t always translate to a big gain on investment. In the Boston metro, the $189,000 gross profit from a typical flip represented only 29.12 percent of the final sale price.
Nationwide, profits on home flips increased. The latest data showed that investors across the country typically earned a 30.4 percent profit nationwide before expenses on homes sold during the second quarter of this year, marking the fourth time in five quarters that margins increased following a six-year period of nearly continuous drop-offs.
Gross profits on typical flips around the country also increased to about $73,500. That remained down from a high of almost $81,000 reached in 2022, but up from $70,000 in the first quarter of 2024 and more than $12,000 above the lowest point of 2023.
“The spring home-buying season of 2024 brought another sign of hope for home flippers that the rebound in fortunes that began for them last year was more than just a temporary thing,” ATTOM CEO Rob Barber said in a statement. “It’s not as if profits have shot through the roof and investors are riding a new wave of good times. Far from it, as they continue to struggle to benefit from the broader market boom. But the second-quarter numbers did show another step in the right direction.”
While profits ticked upwards, home flips as a portion of all home sales decreased from the first quarter of 2024 to the second quarter of 2024 in 159 of the 185 metropolitan statistical areas around the U.S. They also went down annually in 115 of those markets.
Graphic by Sam Minton | Commercial Record Staff
