A quarterly survey of roughly 450 fix-and-flip real estate investors showed improving outlooks within the embattled sector to close out last year, with growing optimism for flipped home sales conditions in the first half of 2026.
Developed by investor-lender Kiavi in conjunction with John Burns Research and Consulting, a real estate advisory firm, the Burns + Kiavi Fix and Flip Market Index (FFMI) rose to 62 in the fourth quarter from 61 a year ago and 56 in the third quarter, reversing six consecutive quarters of index declines.
“Flippers attribute strength to lower mortgage rates, easier access to capital, and early signs of a more stable pricing environment as inventory growth slows nationally,” the report said. Gauged from 0 to 100, an FFMI score exceeding 50 indicates market expansion.
Stabilizing conditions were reported across the FFMI’s three component indexes, which track current flipped home sales activity compared to seasonal norms, expectations for six-month flipped home sales, and current availability of pre-flip homes to purchase.
The index for current sales compared to seasonal norms climbed to 60 from 57 a year ago and 53 in the third quarter but landed essentially flat from the end of 2023. Fourth-quarter sales were boosted by lower mortgage rates and the increased use of price cuts as demand for flipped homes slows amid rising resale inventory, according to an analysis accompanying the index.
Improving sales outlook
Markets that stood out in the fourth quarter as particularly poor for flipped home sales compared to seasonal norms were Texas and Southern California at 26% and 28%, respectively. Only 3% and 7% of respondents reported the Southwest and Midwest as falling below their seasonal expectations.
The outlook for flipped home sales over the next six months increased to 67 from 63 a year ago and 57 in the third quarter, reaching its highest level since the end of 2023. Meanwhile, 42% of flippers reported expecting “good sales” through the first half of 2026 — the highest share since the start of 2022 — with only 9% of flippers expecting poor sales.
Flippers were more optimistic than pessimistic in their six-month sales outlooks for every regional housing market, though they were particularly bullish on the Midwest and Southeast and least bullish on expected sales in California.
Despite more than 70% of respondents reporting plans to purchase more pre-flip homes in 2026 than they purchased in 2025 — the highest share in the FFMI’s four-year history — the component index tracking current availability of acquisitions stood at 61 in the fourth quarter, down nine points year over year.
That decline reflects less competition for deals than a year ago, driven by growth in listings. The index considers greater competition for deals as signaling a healthy market.
“More than 23% of flippers report less competition for deals in Texas and Florida, where rising inventory has made pre-flip acquisitions easier,” the report stated. “Flippers remain more active in markets outside the Sun Belt, where housing stock is older and where inventory has not grown as much.”
The most competition for acquisitions was reported in the Northwest region and Northern California.
Pricing expectations shift
As flippers in certain markets struggle to sell completed flips and consider alternative exit strategies, the report indicates that nearly two-thirds of fourth-quarter flipped home sales fetched $499,000 or less. The share of overall flipped-home sales that sold for less than $300,000 rose from 39% to 41% over the year, while the share that sold for between $750,000 and $1 million fell from 8% to 6%.
With the average price of flipped homes sold in the fourth quarter around $454,000, the share of flippers willing to pay more for acquisitions as a percentage of a flip’s after-repair value (ARV) declined over the year, with 42% of flippers willing to pay 60% of ARV or less compared to 36% a year ago.
Just 14% of flippers reported selling their completed projects above their initial ARV estimate, the lowest share in the FFMI’s history and down from 19% a year ago, 20% at the end of 2023 and 25% at the end of 2022. Flippers were three percentage points more likely to report selling “mostly below” their initial ARV estimate as opposed to “mostly above” it.
Amid this difficult pricing environment, 44% reported increasing their use of sales incentives to offload properties, while 41% reported the use of price cuts. Overall flipped home transactions fell to around 37,000 in the fourth quarter, a 9% decline and the lowest quarterly volume since the third quarter of 2015, according to index data.
