One metropolitan area in Ohio proved lucrative for home flippers in the third quarter of 2019, according to a recently released report.
According to information from ATTOM Data Solutions, property owners in the Cleveland metropolitan statistical area who purchased homes or condos and turned them around for quick sale in the third quarter of 2019 were, on average, able to more than double the price initially paid.
In the report on U.S. home flipping trends from June to September 2019, ATTOM researchers found property owners in eight metropolitan areas across the country were able to more than double their money.
The Cleveland area ranked fourth, with average home flips netting 109.8 percent more. The Pittsburgh area led the pack with 132.6 percent, followed by Scranton, Pa., at 122.5 percent, and Flint, Mich., at 111.2 percent.
Home flippers historically have bought and quickly resold homes for a profit, typically after making a series of repairs or improvements to raise the property’s value.
The high yields reported in the Cleveland area bucked a national trend, according to the ATTOM analysis. Profit margins from home sales elsewhere in the U.S. were on the downswing in a number of metrics.
On the whole, 56,566 single-family homes and condos were flipped across the U.S. in the third quarter of 2019, according to ATTOM’s analysis. The figure represented a 12.9 percent decrease from the previous quarter and a 6.8 percent decrease from the third quarter of 2018.
In the ATTOM report, Maksim Stavinsky, co-founder and chief operating officer of Roc Capital, said homebuyers in a number of areas of the country have opted to hang on to renovated properties and rent them, rather than sell them at a loss in the current marketplace.
“We have been seeing a decline in projected and realized profits for borrowers on projects, despite the fact that borrower financing costs have been meaningfully coming down,” Stavinsky said in the report.
In a statement, Todd Teta, chief product officer at ATTOM Data Solutions, said the home flipping declines point to narrowing profits across many areas of the country.
“The retreat back to more normal levels of sales comes amid broader market forces that are making it harder and harder for investors to complete the kinds of deals they were getting as recently as last year,” Teta said.
ATTOM researchers also singled out two Ohio metropolitan areas in a separate report from the same statistical period.
The Cleveland and Columbus areas also were among the top 10 metro markets with all-cash purchases used to fund flipped homes.
The Cleveland-Elyria topped the list, at 79.2 percent, while 72.5 percent of the flipped home sales in the Columbus area were obtained through all-cash purchases, according to the analysis.
Other metro areas included in the list were Detroit-Warren-Dearborn, at 78.9 percent; Pittsburgh, at 77.2 percent; Buffalo-Cheektowaga-Niagara Falls, N.Y., at 76.4 percent; and Birmingham-Hoover, Ala., at 76.2 percent.