Dallas HGTV fans who are inspired to flip a home should look to two Dallas ZIP codes, in particular — 75243 and 75228.
While the national average profit for home flipping is about $65,520, the average profit in the 75243 ZIP code is actually quite a bit higher, at $78,250, according to new data from ATTOM Data Solutions’ 2Q 2018 U.S. Home Flipping Report. Dallas’ 75228 ZIP code did even better, with a gross profit average of $83,557.
ATTOM Data Solutions curates the nation’s premier property database. Its report, which examines average gross returns on investments for specific ZIP codes as well as the national averages, found that 75243 also averaged 169 days from purchase to flip, with a 41.5 percent second-quarter return on investment on flips. The average time to complete a home flip was 186 days.
In contrast was the 75071 ZIP code in McKinney, where the average time from purchase to flip was 198 days, and the average profit was negative $7,750.
Nationally, homes flipped in the second quarter of 2018 had an average gross return of 44.3 percent, down from 47.8 percent the previous quarter. It’s the lowest average gross flipping ROI since the third quarter of 2014.
The report shows that flipping homes might be losing its appeal for wannabe fixer-upper folks. A total of 48,768 U.S. single family homes and condos were flipped in the second quarter, at a rate of 5.2 percent of all sales, down from a 6.6 percent in the first quarter. Homes sold for an average of $65,520 more than purchase price, which is a dip from the $69,500 in average profit the previous quarter.
ATTOM also reported that 32.3 percent of homes flipped in the second quarter were purchased via distressed sale — either in foreclosure or bank-owned, down from 35.8 percent the previous quarter and down from 38.7 percent a year ago.
“Fewer distressed sales are limiting the ability of home flippers to find deep discounts even while rising interest rates are shrinking the pool of potential buyers for flipped homes,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “These two forces are squeezing average home flipping returns, pushing investors to leverage financing or migrate to markets with more distressed discounts available to achieve more favorable returns.”
Overall, states with the highest average flipping ROI in the second quarter were Louisiana (102.5 percent), Pennsylvania (100.3 percent), Ohio (81.4 percent), Maryland (76.1 percent), and Tennessee (74.9 percent), the report says.
Among 140 metropolitan statistical areas with at least 50 flips and a population of at least 200,000, those with the highest average gross flipping profit were Pittsburgh, Pennsylvania (162.7 percent); Hickory-Lenoir-Morganton, North Carolina (129.0 percent); Mobile, Alabama (126.6 percent); Buffalo, New York (107.5 percent); and Baton Rouge, Louisiana (107.1 percent).
The report noted a few other interesting trends in the second quarter of 2018:
- The median year built of homes flipped was 1978, tied for the oldest median year built as far back as data is available — 2000.
- The median square footage of homes flipped was 1,408, the smallest median square footage as far back as data is available — 2000.
- A total of 40,265 entities flipped properties, a ratio of 1.21 flips per entity, the lowest ratio of flips per entity since 2008 — a more than 10-year low.
A version of this story originally was published on CandysDirt.com.