Financed home flips surge in Q1

The Scotsman Guide - Victor Whitman - 08 Jun 2017

Home flipping fell to a two-year low in the first quarter, but the number of financed flips is increasing, Attom Data Solutions reported.

Home flips — defined as a home sold twice at arm’s length within 12 months — clocked in at the lowest number since the beginning of 2015 and fell by 6 percent year over year.

"Flipping was down because overall sales were down," Attom Data Solutions Senior Vice President Daren Blomquist told Scotsman Guide News. "We did see a slowdown in sales activity in the first quarter, and I think thatultimately ties back mostly to the rise in interest rates. That cooled the market a little in the first quarter of this year." 

Financed flips, though, were at a nine-year high.

Home flippers financed an estimated $3.5 billion in purchases for homes flipped during the quarter, up from $2.4 billion a year ago. That was the highest level since the fourth quarter of 2007, and a more than nine-year high, Blomquist said. He said investors have shown an appetite to invest in real estate.

"That availability of capital is helping to push more lending to flippers, Blomquist said. "It feels like another company is sprouting up every day that is providing financing to flippers, and that is helping to drive that number higher."   

Attom Data Solutions estimated there were 43,615 flips in the first quarter in the 950 counties it tracks, which represents about 80 percent of the U.S. population.

Some 33 percent of the flips were financed, which is up from 29.5 percent from the first quarter of 2016 and the highest share of financed deals since the third quarter of 2008.

Among metros, the highest share of financed flips included Colorado Springs, Colorado (69.3 percent); Denver (54.8 percent); Seattle (51.6 percent); Boston (51.3 percent); and Providence, Rhode Island (47.3 percent), Attom Data Solutions reported.