The number of homes flipped by investors in 2024 declined for the second straight year, dropping 7.7% from 2023 and a whopping 32.4% from a recent peak in 2022, according to Attom’s 2024 Home Flipping Report.
Last year, 297,885 single-family homes and condominiums were flipped in the U.S., a steep decline from the nearly 441,000 flipped in 2022. That drop was mirrored by a decline in flips as a portion of all sales, as well: Flips represented 8.1% of all sales in 2023, but just 7.6% in 2024.
The decline in overall flips is likely attributable to declines in the profitability of flipping homes over the past decade. After hitting a peak of 54.2% return on investment (before accounting for mortgage interest, property taxes, renovation expenses and other holding costs) in 2016, flipping has seen tighter profit margins ever since, as home prices have increased but the inventory of foreclosures and other distressed properties has declined.
There are some bright spots for investors still willing to take on home flips, however. This past year, profits and profit margins increased over 2023. Gross profits (the difference between the median sales prices and the median amount originally paid by investors) on typical home flips rose to $72,000 nationwide in 2024, up from $67,846 in 2023.
Last year’s gross profits translate to a 29.6% return on investment compared to the acquisition price, up from 28.6% in 2023 and even higher than the 29.4% return in 2022.
Home sale prices continue to stay strong, and they increased just enough to help flipping investors see their profit margins tick upward, as the median prices of flipped homes increased slightly faster than the median price paid to acquire the properties: 3% versus 2%.
Like all things in real estate, location matters. And while home flipping as a portion of overall sales declined in 145 of the 213 metropolitan statistical areas covered by Attom’s report, there were several areas that saw increases in home flips from 2023 to 2024.
In metro areas with at least 100 home flips and a population of 200,000 or more, home flipping increases from 2023 to 2024 were led by: Cedar Rapids, Iowa (up 49.6%); Bellingham, Wash. (up 28.2%); Warner Robins, Ga. (up 26.8%); Merced, Calif. (up 24.5%); and Norwich-New London, Conn. (up 23.4%).
On the other side, some areas saw a larger decline in flips than the nationwide average. In metro areas with a population of 1 million or more, the largest declines from 2023 to 2024 were seen in: Charlotte, N.C. (down 18.5%); Jacksonville, Fla. (down 16.9%); New Orleans (down 16.4%); Denver (down 15%); and Miami (down 13.6%).
Location also plays a significant role in profits, as well, and although gross profits were up nationwide, how much investors recouped varied widely in 2024. Gross profits increased in 141 of the 213 metro areas analyzed by the report, representing 66% of metros.
In areas with a population of 1 million or more, the areas with the largest gross flipping profits in 2024 were: San Jose, Calif. ($283,000 profit); San Francisco ($218,000 profit); New York ($175,000 profit); San Diego ($175,000 profit); and Washington, D.C. ($170,000 profit).
Unfortunately, while the nationwide average was $72,000 in gross profits on the typical home flip in 2024, there were several cities where investors grossed significantly less. The weakest gross profits in metro areas with a population of at least 1 million were seen primarily in Texas in 2024 and include: Austin (just $8,844 profit); San Antonio ($17,832 profit); Houston ($20,846); and Dallas ($24,233). Kansas City, Mo., clocked in at $39,709 profit.
Although home flips have long represented a niche market in real estate, their portion of the overall pie has been shrinking in recent years, as home inventory — particularly distressed or bargain-priced homes — has remained tight amid a years-long home-price boom. Recent increases in profits and profit margins are a good indicator for the market, although uncertainty still looms with mixed economic forecasts and higher mortgage rates. Investors will need to carefully consider when and where to make their next flipping moves.
