The business of flipping houses is among the victims of the topsy-turvy pandemic housing market, and a chart shows just how swiftly and deeply it has fallen in popularity since early 2020.
In the first quarter of 2021, only 2.7% of all home sales were flips—deals in which an investor buys a house and then aims to sell it for a higher price to make a profit—according to ATTOM Data, a property data company. That’s compared to 7.5% in the first quarter of 2020 and 8.8% at the beginning of 2006, the height of the housing bubble. The latest data shows the lowest rate of home flipping since at least 2000.
The drop-off in popularity probably has to do with the rapidly increasing price of houses, which has pushed down profit margins for flipping, Todd Teta, chief product officer at ATTOM Data, said in a report.
“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,” Teta said. “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.”
Have a question, comment, or story to share? You can reach Diccon at email@example.com.