FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 18 March 2017

At The National Level, Flipping Activity Is The Second Lowest Since 2012

from CoreLogic

-- this post authored by Bin He

Flipping is the term used when an investor purchases a property, renovates and repairs it, and then re-sells it within a short period of time for a profit. In a blog series I published a while back, Is Flipping Coming Back? Part I and Part II, I concluded that in Q1 2016 flipping activity was well below its historical high at the national level although there were geographic variations at the metro level.

Now that 2016 is behind us, it’s time to revisit this topic to see how things have changed. A little different from the analysis I did before, a flipped property is now defined as a property that is bought and sold within 12 months rather than nine months since we have observed it takes a longer time to flip a property. Furthermore, non-disclosure states are now included in the analysis. We aren’t able to know its price-related metrics but it is feasible to derive the share of flipped properties to sales. In Part I of this series we will focus on the national-level analysis, and in Part II we will zoom in on metro areas.

At the national level, the ratio of flips to sales stands at 4.9 percent in 2016, which is well below the peak value of 7.5 percent reached in 2005, as shown in Figure 1. As a matter of fact, this is the second lowest rate of flipping activity since 2012, as the lowest since 2012 occurred in 2015 with a flipping percentage of 4.8. It appears that flipping activity has slowed in the past two years since the start of the housing recovery, thanks to a five-year high in the rate of home-price appreciation and still-tight for-sale inventory.

In 2016, the real median gross gain (in 2016 dollars) rose to $54,700 per property flipped, which is approaching the historical high of $56,411 (in 2016 dollars) seen in 2005 prior to the housing crash, as Figure 2 shows1. On the other hand, the median percentage gross gain has declined since it peaked in 2013. We continue to believe the decline of the percentage gain might have something to do with the decline of the share of distressed sales, which leads to high acquisition cost. From this CoreLogic Insights blog posted by Molly Boesel, Cash and Distressed Sales Update: November 2016, we see that the share of distressed sales has declined significantly and was just 7.7 percent in October 2016. From Figure 2 we can also see that the median percentage gross profit was about 20 percent between 1996 and 2008 and then increased to above 30-40 percent after 2008, which is largely due to the high acquisition cost on the investors’ part from 2000 to 2008, as Figure 3 shows.



1 Gross profits are in real terms of 2016 dollars so that we can eliminate the impact of inflation over time. CPI is used to derive the real dollar amount.

©2017 CoreLogic, Inc. All rights reserved.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Was Marx Right?
Angst in America, Part 4: Disappearing Pensions
News Blog
March 2017 Pending Home Sales Seasonally Adjusted Index Declines
Durable Goods New Orders Improved in March 2017
22 April 2017 Initial Unemployment Claims Rolling Average Marginally Improves
Infographic Of The Day: These Are The Countries Most and Least Prepared For Cyber Attacks
Documentary Of The Week: History Of The World From The Beginning Of 'Time'
The Four Factors That Decide How We Feel About Income Inequality
Why Mexican Immigrants Are Healthier Than Their US-born Peers
The US View On Climate Change
Hilarious Security Camera Compilation
Brexit: Whither The Pound?
Is Chinese Growth Overstated?
Trading Ideas Between Countries
Recession To Recovery: A Decade In Perspective
Investing Blog
Facebook Is Coming After Snapchat From All Sides
Know Your Energy Sector
Opinion Blog
Squeezing The Philippine Peso
Trump Just Imposed A New Tax On Lumber
Precious Metals Blog
A New Age For Gold
Live Markets
27Apr2017 Pre-Market Commentary: Wall Street To Open Higher, But May Not Remain In The Green By The Close, WTI Crude Trading In The Mid 48 Handle And Slipping
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved