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NATIONAL SNAPSHOT
Regional
HOUSE FLIPPING REACHES A POST-CRASH HIGH NATIONWIDE
Acquiring Costs Soar as Home Prices Continue to Grow
By Bin He
House flipping is the act of acquiring a home, performing renova-
tions and repairs, and then selling it for a profit, usually during a
short time period. For this analysis, a "flipped
property" is defined as a property that was
bought and sold within 12 months. Both dis-
closure and nondisclosure states were included
in the analysis, and while price-related metrics
in nondisclosure states are not included here,
the share of flipped properties to sales can be
derived from public records.
At a national level, the ratio of flipped
properties to sales reached 6.2 percent in the
first quarter of 2018, which matches the post-
crash high in the first quarter of 2013 (Figure
1). e first time it reached this level after the
housing crash, home prices had just started to recover, and there were
still a considerable number of distressed properties on the market.
However, the flipping dynamics have changed over time, with the
share of distressed properties sold declining
significantly, from 30 percent in January 2013
to 4.4 percent at the end of 2017, according to
CoreLogic Market Trends.
Additionally, as a result of six years of
home-price appreciation and limited for-sale
inventory, in many areas, home prices have
already passed the peak values reached before
the market crash of 2008. Consequently, the
acquisition cost in nominal dollars for inves-
tors has increased drastically (Figure 2). High
acquisition cost, tight inventory, and rising
flipping activities together point to possible
speculation: investors are betting on continuous home-price growth.
STATS AT A GLANCE
The ratio of flipped properties to sales
reached 6.2 percent in Q1 2018.
The share of distressed properties sold
declined from 30 percent in January 2013
to 4.4 percent at the end of 2017.
In many areas, home prices have already
passed the peak values reached before
the market crash of 2008.
