February found more first-time buyers getting a chance
of ConsumerAffairsFor the last couple of decades, investors made lots of money in real estate, buying distressed properties, remodeling them and putting them on the market, a practice known as flipping.
That made it harder for people who wanted to buy a house to live in because they had to compete with people buying homes as a business and often helped drive up prices. But that may be changing.
A new report from ATTOM, a provider of property data, shows there was a notable decline last year in the number of flipped properties. The report shows that in 2024, 297,885 single-family homes and condos were flipped across the nation, representing a 7.7% drop from 2023 and a significant 32.4% fall from the 2022 peak.
The portion of all home sales that were flips also decreased, falling from 8.1% in 2023 to 7.6% last year. Rob Barber, CEO at ATTOM, said data show investors shied away from transactions in 2024, even though individual flips were more profitable.
Gross profits on typical home flips rose to $72,000 nationwide, up from $67,846 in 2023. This translated to a 29.6% return on investment, a slight increase from the previous year. However, this figure remains significantly lower than the 54.2 percent peak seen in 2016.
Affordability issues
When flipped homes are listed for sale, theyre available to homebuyers. But affordability could be an issue. The report shows that the median price of flipped homes increased slightly faster than the median price investors paid to acquire them. The median resale price rose 3.3% to $315,000, while the median purchase price increased 2.5% to $243,000.
When the National Association of Realtors reported Februarys existing home sales this week, it noted that individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in February, down from 17% in January and 21% from February 2024.
At the same time, first-time buyers were responsible for 31% of sales in February, up from 28% in January 2025 and 26% in February 2024.
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Posted: 2025-03-21 17:24:38
