Blomquist: u201cHome flipping is settling back into a more historically normal pattern.u201d<@SM>Since 2011, home flips peaked nationwide in the fourth quarter of 2012 and have been decreasing ever since.<@SM>Average US home-flipping profits took a dive at the end of 2013, picking up again in Q1 of this year, but they have been decreasing.<@SM>While second-quarter flipping patterns varied among each of the strongest flipping markets since 2011, New York's pattern was the most dramatic, with flips shooting above 3,000 in Q4 2013 and then dropping below 1,000 in Q2 of this year.


IRVINE, CA—Flipping of US residential properties dropped below 5% of all sales in the second quarter, according to a report from RealtyTrac. Nearly 31,000 single-family homes were flipped nationwide during the quarter, representing 4.6% of all US single-family home sales, which is down from 5.9% in the first quarter and down from 6.2% in the second quarter of 2013, the firm reports.

In addition, investors averaged a gross profit of more than $46,000 per flip on homes flipped in the second quarter, a 21% gross return on the initial investment. The average gross return was down from 24% in the first quarter and down from 31% a year ago, which was the peak in percentage return on flips nationwide since RealtyTrac began tracking the flipping data in the first quarter of 2011.

According to Daren Blomquist, VP of RealtyTrac, “Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013. Flippers no longer have the luxury of 20% to 30% annual price gains to pad their profits. As the market softens, successful slippers will need to focus on finding properties that they can buy at a discount and to which they can efficiently add value.”

As reported in June, several California markets were among those with the most home flips in the previous year, according to a report from RealtyTrac. Los Angeles, San Diego, Inland Empire and Sacramento were listed among the top 22 US markets that saw the greatest number of home flips between April 2013 and March 2014.