5 Percent of U.S. Single Family Home Sales in 2014 Were Flips, Down to Lowest Level Since 2011 Despite Increase in Q4

IRVINE, CA--(Marketwired - February 27, 2015) - RealtyTrac^® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released its Q4 and Year-End 2014 U.S. Home Flipping Report, which shows that 136,269 U.S. single family homes were flipped in 2014, 5.4 percent of all single family home sales during the year -- the lowest share of flips since 2011.

A total of 32,578 U.S. single family homes were flipped in the fourth quarter, representing 5.3 percent of all single family home sales during the quarter. The 5.3 percent share of flips in the fourth quarter was up 11 percent from the previous quarter but still down 12 percent from a year ago.

The average gross profit -- the difference between the purchase price and flipped price -- for completed flips of single family homes in the fourth quarter was $65,993, representing a 37.1 percent gross return. That was up from an average gross profit of $65,285 representing a 36.5 percent gross return in the third quarter, and an average gross profit of $63,017 representing a 36.4 percent gross return in the fourth quarter of 2013.

"Investors have picked much of the low-hanging fruit when it comes to home flipping over the past three years since home prices bottomed out in the first quarter of 2012," said Daren Blomquist, vice president at RealtyTrac. "As home price appreciation slows to single digits in most markets, flippers need to be more selective and creative about the properties and neighborhoods they target.

"In many cases the best neighborhoods for profitable flipping in a slower-appreciating market are those that come with a higher risk because of location and condition of properties, but also have a bigger upside if investors are able to correctly predict the path of progress in the region," Blomquist added. "It appears that most investors completing flips in the fourth quarter were able to do just that. Even though the share of flips was down from a year ago during the quarter, the average gross return per flip increased."

Zips with highest share of Q4 flips in Detroit, Los Angeles, Memphis, Miami
Among zip codes with at least 10 single family home flips completed in the fourth quarter of 2014, there were 10 where flips represented 25 percent or more of all single family home sales during the quarter. Metropolitan statistical areas with top 10 zip codes for share of flips in the fourth quarter were Detroit, Los Angeles, Memphis, Miami, Jacksonville, Florida, Tampa and San Diego.

Zip Code	City	MSA		Q4 2014 Home Flips	Pct of Total Sales	YoY Pct Change		Avg Purchase Price	Avg Gross ROI	Flipping Avg Gross Profit
48141	Inkster	Detroit-Warren-Livonia, MI		32	29.4%	234.7%		$41,522	38.2%	$15,874
90003	Los Angeles	Los Angeles-Long Beach-Santa Ana, CA		15	28.8%	20.2%		$193,733	47.8%	$92,567
38116	Memphis	Memphis, TN-MS-AR		23	27.7%	9.5%		$57,045	52.1%	$29,743
33055	Opa Locka	Miami-Fort Lauderdale-Pompano Beach, FL		26	27.4%	62.1%		$103,241	64.8%	$66,895
33169	Miami	Miami-Fort Lauderdale-Pompano Beach, FL		26	26.8%	52.6%		$105,317	65.5%	$68,933
32254	Jacksonville	Jacksonville, FL		14	26.4%	71.7%		$61,100	29.7%	$18,150
90002	Los Angeles	Los Angeles-Long Beach-Santa Ana, CA		16	26.2%	15.4%		$174,214	47.1%	$82,071
48225	Harper Woods	Detroit-Warren-Livonia, MI		43	25.3%	47.0%		$34,747	50.5%	$17,552
33634	Tampa	Tampa-St. Petersburg-Clearwater, FL		17	25.0%	35.0%		$89,945	61.6%	$55,413
92105	San Diego	San Diego-Carlsbad-San Marcos, CA		15	25.0%	225.0%		$245,250	39.0%	$95,700

Averages from the top 10 zip codes for share of flips during the fourth quarter:

• Average of 23 flips during the fourth quarter

• Average flip share of 27 percent of all single family home sales

• Average increase of 77 percent in share of flips from a year ago

• Average purchase price of $110,611

• Average gross profit of $95,700 and average gross return of 49.6 percent

Zips with highest gross return on Q4 flips in Baltimore, St. Louis, Jacksonville, Chicago
Among zip codes with at least 10 single family home flips completed in the fourth quarter of 2014, there were 10 where the average gross return on investment for flips was 120 percent or higher. Metropolitan statistical areas with top 10 zip codes for highest average returns on flips in the fourth quarter were Baltimore, St. Louis, Jacksonville, Florida, Chicago, Detroit and Washington, D.C.

Zip Code	City	MSA	Q4 2014 Home Flips	Pct of Total Sales	YoY Pct Change	Avg Purchase Price	Avg Gross ROI	Flipping Avg Gross Profit
21218	Baltimore	Baltimore-Towson, MD	14	11.0%	2.0%	$51,233	208.6%	$106,847
63139	Saint Louis	St. Louis, MO-IL	18	14.0%	-9.3%	$9,000	163.9%	$14,750
32205	Jacksonville	Jacksonville, FL	19	13.8%	-10.5%	$52,216	157.0%	$81,962
60643	Chicago	Chicago-Naperville-Joliet, IL-IN-WI	12	11.8%	31.8%	$150,750	153.7%	$231,750
60402	Berwyn	Chicago-Naperville-Joliet, IL-IN-WI	20	11.5%	0.1%	$93,000	149.7%	$139,222
21207	Gwynn Oak	Baltimore-Towson, MD	20	13.2%	-29.4%	$76,275	149.7%	$114,168
48220	Ferndale	Detroit-Warren-Livonia, MI	12	6.7%	54.1%	$70,200	141.5%	$99,300
21213	Baltimore	Baltimore-Towson, MD	11	6.7%	19.2%	$39,180	137.9%	$54,020
63116	Saint Louis	St. Louis, MO-IL	21	13.3%	-10.4%	$27,721	127.7%	$35,407
20743	Capitol Heights	Washington-Arlington-Alexandria, DC-VA-MD-WV	22	19.5%	-18.9%	$97,371	119.9%	$116,764

Averages from these top 10 zip codes for biggest average percentage return on flips:

• Average of 17 flips during the fourth quarter

• Average flip share of 12 percent of all single family home sales

• Average increase of 3 percent in share of flips from a year ago

• Average purchase price of $66,695

• Average gross profit of $99,419 and average gross return of 150.9 percent

Zips with biggest annual increase in Q4 flips in Seattle, Atlanta, New York, Chicago, L.A.
Among zip codes with at least 10 single family home flips completed in the fourth quarter of 2014, the top 10 with the biggest year-over-year percentage increase in the share of flips were in the following metropolitan statistical areas: Seattle, Atlanta, New York, Chicago, Los Angeles, Denver, Cincinnati, Sandusky, Ohio, and Akron, Ohio.

Zip Code	City	MSA	Q4 2014 Home Flips	Pct of Total Sales	YoY Pct Change	Avg Purchase Price	Avg Gross ROI	Flipping Avg Gross Profit
98155	Seattle	Seattle-Tacoma-Bellevue, WA	11	8.4%	815.3%	$249,375	54.0%	$134,738
30252	Mcdonough	Atlanta-Sandy Springs-Marietta, GA	15	8.6%	520.7%	$143,171	36.6%	$52,463
11746	Huntington Station	New York-Northern New Jersey-Long Island, NY-NJ-PA	12	5.6%	460.6%	$303,100	20.3%	$61,500
60473	South Holland	Chicago-Naperville-Joliet, IL-IN-WI	13	14.8%	446.6%	$76,375	112.8%	$86,125
92677	Laguna Niguel	Los Angeles-Long Beach-Santa Ana, CA	12	8.2%	417.8%	$712,889	15.6%	$111,278
30093	Norcross	Atlanta-Sandy Springs-Marietta, GA	11	17.7%	396.8%	$79,433	27.0%	$21,467
80241	Denver	Denver-Aurora, CO	11	8.3%	395.8%	$237,766	20.9%	$49,614
45240	Cincinnati	Cincinnati-Middletown, OH-KY-IN	11	15.3%	381.3%	$74,937	70.6%	$52,913
44089	Vermilion	Sandusky, OH	11	13.4%	369.5%	$72,333	116.5%	$84,233
44221	Cuyahoga Falls	Akron, OH	12	11.7%	327.2%	$69,412	71.0%	$49,270

Averages from the top 10 zip codes for biggest annual increase in the share of flips:

• Average of 12 flips during the fourth quarter

• Average flip share of 11 percent of all single family home sales

• Average increase of 453 percent in share of flips from a year ago

• Average purchase price of $201,879

• Average gross profit of $70,360 and average gross return of 54.5 percent

Metros with highest share of fourth quarter flips
Among metropolitan statistical areas with at least 50 single family home flips in the fourth quarter, those with the highest share of flips as a percentage of total single family home sales were Miami (11.0 percent), Memphis (10.7 percent), Tampa (10.5 percent), Palm Bay-Melbourne-Titusville, Florida (10.1 percent) and Deltona-Daytona Beach-Ormond, Florida (10.0 percent).

Metros with highest gross returns on fourth quarter flips
Among metropolitan statistical areas with at least 50 single family home flips in the fourth quarter, those with the highest average gross percentage return on flips were Flint, Michigan (73.5 percent gross return), Pittsburgh (68.2 percent), Clarksville, Tennessee (67.0 percent), Baltimore (64.0 percent), and Chattanooga, Tennessee (63.4 percent).

Report methodology
RealtyTrac analyzed sales deed data and automated valuation data for this report. A single family home flip was any transaction that occurred in the third quarter where a previous sale on the same property had occurred within the last 12 months.

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