What's the status of the home flipping market in DFW?  
 
Last week the U.S. Home Flipping Report for the second quarter of 2017 was released by the data provider Attom Data Solutions.  They provide the largest multi-source property database in the nation.  
 
The headline from the report was that "U.S. home flipping rate plateaus in Q2 2017" vs. last year.  Nationwide the number of homes flipped fell to 5.6%.  This is down from 6.9% in the previous quarter, but unchanged from a year ago.  So, from a national perspective the U.S. home flipping rate was unchanged when comparing Q2 of 2017 and 2016.  
 
The article said the slowdown is due to profits, quoting the average gross return of flips nationally at $67,516.  This represents a nationwide average of 48.4% return on investment.  Because this number has declined for three consecutive quarters, the publisher decided to make this part of the headline - "Average Flipping Returns Decline for Third Consecutive Quarter".   However, the chart below indicates a small dip in the overal upward trend.
 
 
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Referencing the same study, the Dallas Business Journal took a more negative tone in their headline:  "Dallas among worst cities for home flipping, report says".  Their rationale was based on statistic that among the 101 metro areas analyzed in the report, the Dallas-Fort Worth region had some of the lowest rates of return for flips.  Dallas-Fort Worth's average return on investment was 29.1% vs. the national average ROI of 48.4%.  The DBJ article didn't seem to find any of the good news.
 
A more optimistic and comprehensive Dallas Morning News article quoted numbers from the same nationwide study.  Most notably, the article cited the number of flips in DFW rose by 13% vs. the same period last year.  Only 54 of the 101 metro areas reported home flipping rate increases, so this number indicates growth in our market compared to many others.

 

Other interesting statistics related to DFW residential flips in Q2 of 2017 include:
 

The average selling price was $229,824.  

The average purchase price was $178,000.

The average profit was $51,824.

The average gross return was 29.1%.

The largest number of home flips were in Dallas, Tarrant and Denton counties.

 

DFW Home Flips.jpg

 

The report is full of other interesting information and insights if you'd like to read it here.  

 

 

John Spears

Managing Member, Avondale Private Lending

Avondale Private Lending is a private investment fund focused on residential fix-and-flip and bridge loans for properties in the Dallas-Fort Worth area.  The company is currently funded with $6 million of long-term commitments, allowing Avondale to quickly fund loans at favorable rates and terms.  

 

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