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IRVINE, CA—The incidence of home flippingnationwide is decreasing at the same time as average gross returnsare rising. According to a report from RealtyTrac, 3.7%of all US single-family home sales in Q1 wereflips—defined as home that were purchased and subsequently soldagain within six months—which is down from 4.1% in the fourthquarter of 2013 and down from 6.5% in the first quarter of2013.

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On the “flip” side, the average sales price of single-familyhomes flipped in the first quarter was $55,574 higher than theaverage original purchase price, the report says. That gross profitprovided flippers with an unadjusted ROI of 30% of the averageoriginal purchase price. The average gross profit per flip a yearago was $51,805 for an unadjusted ROI of 28%.

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According to Daren Blomquist, VP of RealtyTrac,“Slowing home-price appreciation early this year in many of themost-popular flipping markets put some investors in danger offlying too close to the sun. But investors appear to haverecalibrated their flipping strategy, accounting for the slowerhome-price appreciation even if that means fewer flips. This isanother good sign that this housing recovery is behaving much morerationally than the last housing boom, which was built largely onunfounded speculation rather than fact-based calculations.”

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As GlobeSt.com reported in February, the incidence of UShome flipping increased 16% in 2013, and averagegross profit on flips rose to more than $62,000, according toRealtyTrac. A total of 156,862 single-family homeswere flipped last year, up 116% from 2011.

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.