Home flipping becoming less common and less profitable in Dallas-Fort Worth
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Home flips in Dallas-Fort Worth and across the country were down in the first quarter from a year ago.
But D-FW still wound up among the major U.S. metro markets with the most house flips in the first three months of 2019, according to a new report by Attom Data Solutions. Home flips in both the U.S. and North Texas fell in the first quarter from the same period last year.
Nationwide, home resales by investors and fixer-uppers dropped 8% from first quarter 2018. In D-FW area, flips were 2% lower year-over-year.
More than 1,100 D-FW homes were flipped in the quarter — the ninth-highest total for the more than 135 markets Attom Data surveyed.
Attom Data counts flips as a single-family home or condo sale that resulted in any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months.
The volume of home flips around the country has fallen in the last few years as home prices have risen and the inventories of low- and moderate-priced houses available to buy have fallen.
Some investors may have decided to sit on the sidelines, Attom Data analysts said.
"With interest rates dropping and home price increases starting to ease, investors may be getting out while the getting is good, before the market softens further," Attom Data’s chief product officer Todd Teta said in a statement.
"While the home-flipping rate is increasing, gross profits and return on investment are starting to weaken, and the number of investors that are flipping is down 11% from last year," he said. "If investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more."
Attom Data found that 7.5% of total D-FW home sales in the first quarter were flips. That’s about the same as the nationwide share.
The average North Texas property-flipper made a profit of $30,588 — down from almost $39,000 a year ago. Nationwide, the average flipping profit was about $60,000.
The time it took to flip the house also was up in D-FW area from a year ago, to an average of almost six months.
The metro areas with the most flips were Phoenix, New York, Atlanta and Miami — all with more than 1,500 first quarter sales, according to Attom Data.
Some markets saw big year-over-year percentage gains in home flips, including Columbus, Ga., (up 83%); Raleigh, N.C., (up 73%), and Charlotte, N.C., (up 65%).
Among major Texas metros, San Antonio had the largest share of first-quarter home flips (8.1%), while Austin had the smallest share of the market at only 4.9%.
More than 3,000 houses were flipped in Texas during the early months of 2019.