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By Oregon Small Business Association,
The profit earned by people purchasing, fixing up, and flipping homes has dropped to the lowest level in a decade, but they still receive a good profit, according to Attom Data Solutions LLC, a national property database company. The numbers show the difference between the purchase and sales prices rose to $67,000 in the second quarter of 2021, or a 33.5 percent return on investment. However, that’s down from 40.6 percent a year ago, during the second quarter of 2020.
The new ROI of 33.5 percent was last seen among house flippers in the first quarter of 2011 as the economy and housing markets were still recovering from the Great Recession.
Despite the drop, a 33.5 percent return on a short-term investment remains good, according to Todd Teta, Attom’s chief product officer.
Soaring home prices account for part of the drop, he said. Median flipped home prices in the second quarter of 2021 hit $267,000, an all-time high and 10.6 percent above the first quarter’s $241,400. That’s 18.7 percent higher than the $225,000 price a year ago.
But it cost more for remodelers to purchase the homes in the first place, which cut into profits.