In Part I of this blog we discussed flipping activity in 2016 – investors buying homes, repairing and selling them within a short period of time for a profit – at the national level. Here we focus on flipping activity at the local metro level for 2016. A flipped property is defined as a property that is bought and sold within twelve months.
Figure 1 lists the 20 markets, among the 100 largest Core Based Statistical Areas (CBSAs) that CoreLogic analyzed, with the highest shares of flipped properties in 2016. Since sale values are not available for public access in non-disclosure states, gross profit and percent gross profit are not available for those CBSAs in these non-disclosure states. According to CoreLogic data and analysis, El Paso, TX has the highest share of flipped properties, followed by Fort Worth-Arlington, TX and Dallas, TX. For these 20 CBSAs, the median gross profit per flipped property ranges from a low of $29,000 in Birmingham-Hoover, AL to a high of $130,000 in Los Angeles-Long Beach-Glendale, CA. The median percentage gross profit ranges from a low of 30.7 percent in Birmingham-Hoover, AL to a high of 66.2 percent in Virginia Beach-Norfolk-Newport News, VA-NC.
Flipping activity was strongest among Texas and Florida CBSAs in 2016. Five of the top 10 markets for flipping are in Texas, and eight of the top 20 markets for flipping are in Florida. Figure 2 shows that in the five hot Texas markets flipping activity in 2016 is comparable to activity seen in 2015. Moreover, in three of those markets, El Paso, Dallas and San Antonio, flipping activity in 2016 is not too far from the post-2000 peak values. The Texas housing market did not really experience the bubble-bust like the rest of the country during 2005-2008, and its home price appreciation has been accelerating. It is worth keeping a close eye on the Texas market. Figure 3 shows in all eight hot Florida markets, six of them had increases in flipping activity in 2016 compared to 2015. However, flipping activity in these Florida markets is still well below the post-2000 peak values, which makes it difficult to label it speculative.
Figure 4 shows the 20 markets with the lowest levels of flipping activity in 2016 among the 100 largest CBSAs analyzed. Albuquerque, NM has the lowest share of flipped properties, followed by Indianapolis-Carmel-Anderson, IN and Hartford-West Hartford-East Hartford, CT. The median gross profit per flipped property ranges from a low of $27,462 in Buffalo-Cheektowaga-Niagara Falls, NY to a high of $106,575 in Boston, MA. The median percentage gross profit ranges from a low of 14.4 percent in Honolulu, HI to a high of 100 percent in Pittsburgh, PA.
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