Miami had the second biggest share of home flips in the country during this year’s second quarter, according to a new report from RealtyTrac. These sales have actually grown since the first quarter, with profits up slightly nationwide.
Out of all the metropolitan area’s single-family home sales, 9.6 percent of them were flips. RealtyTrac defines a home flip as a single-family property that was purchased and re-sold within a 12 month period. Only arms-length sales count, which means both parties involved don’t have any relationship to each other.
Miami was only beat out by Fernley, Nevada, which had flips representing 11.4 percent of its home sales. Five out of the top seven cities for flips were in Florida.
Not only were home flips more common in Miami than almost anywhere else, but the city’s 33134 zip code — primarily in Coral Gables — had the nation’s fourth most expensive home flips in terms of average price. That area saw sales average $561,447 per flip. Next highest on the list was Phoenix, Arizona with $679,040 per flip, followed by Los Angeles, California at $716,656, and finally San Jose at $1,953,033.
A total of 1,383 homes were flipped throughout Miami-Dade and Broward County during the second quarter of 2015. That figure has decreased 6.9 percent year-over-year
Specifically in Miami, a whopping 61.1 percent of those homes acquired for flipping purposes were bought while the home was at some stage of foreclosure, according to the report. This was the fifth highest rate in the nation, with Florida’s Palm Coast topping the list at 70.4 percent.
Though home flips remain high locally, the country is seeing a gradual decline in these short sales. The national rate stood at 4.5 percent during this year’s second quarter, down from 5.5 during the first quarter and 4.9 percent last year. Though these sales are becoming scarce, the average gross profit made from home flips has grown by several thousand dollars. Not including renovation costs or other expenses, the average profit from a home sale in the United States was $70,696 during the second quarter, up from $67,753 in the first quarter.
“Despite the rise in flipping returns in the second quarter, home flippers should proceed with caution in the next six to 12 months as home price appreciation slows and a possible interest rate increase could shrink the pool of prospective buyers for fix-and-flip homes,” said Daren Blomquist, vice president at RealtyTrac, in a statement. “While average flipping returns are up substantially from a year ago at the national level and in moderately-priced markets such as Miami, Atlanta, Phoenix and Minneapolis, flipping returns are softening in some of the higher-priced markets such as San Francisco, Seattle, Denver and Los Angeles.” — Sean Stewart-Muniz