U.S. Home Flipping Drops Below 5 Percent of All Sales in the Second Quarter of 2014 to a 2-Year Low - Seite 2

Metro areas with the most flips were Phoenix (1,438 flips), Los Angeles (1,371 flips) and Miami (1,290 flips). However, all three metro areas saw declines in flipping activity as a share of total home sales from the previous quarter, and Miami was the only one of the three metro areas to see its home flipping share increase from a year ago.

Markets with the best return on flips in the second quarter included Pittsburgh (106 percent), New Orleans (76 percent), Baltimore (73 percent), Virginia Beach, Va. (66 percent) and Daytona Beach, Fla. (63 percent).

Metros with the highest dollar amount of average gross profit on home flips included San Jose, Washington, D.C., San Diego, Los Angeles, and Seattle, all of which had an average gross profit of more than $100,000 per flip.

Flippers face low inventory and rising prices in Seattle, Southern California
"We are seeing a lot of interest in the speculative market by investors looking to capitalize on rising home prices in Seattle, but the challenge they're running into is inventory. We currently have about one month of inventory in Seattle, so competition for homes is fierce, and many homes are selling for well above asking price," said OB Jacobi, president of Windermere Real Estate, covering the Seattle market. "This means investors looking to flip a home and make a healthy profit must think outside the box. Gone are the days of lipstick-on-a-pig flips -- today's flips must be total remodels from the studs out with high-end finishes, built-out basements and additional square footage. Those are the homes that are bringing the most return on investors' dollars in Seattle."

"Our market has seen a large amount of property flipping over the last three years as investors made up a large segment of our market with a lot of international money flowing in as well. The properties have seen large appreciation in average and median sales prices so the investors have had a good return on their money and risk taken," said Steve Rodgers, CEO/president & owner of Real Living Lifestyles, covering the San Diego market. "We are seeing some of the investor market slow down due to an increase in inventory and prices pushing some flippers out of the market, but real estate still remains a great investment no matter who is jumping in!"