The Pandemic Turbocharged the Housing Market, but Not for Home Flippers

Despite the popularity of home-flipping shows on HGTV and Discovery+, the COVID-19 pandemic curbed the number of flip homes bought by investors, renovated, and sold at a profit last year.

In 2020, the number of flips fell 13.1% from the previous year, to hit its lowest point nationally since 2016, according to a recent report from real estate information firm ATTOM Data Solutions. Just over 240,000 homes were flipped last year, making up about 5.9% of all sales.

To come up with its findings, ATTOM looked at sales deed data for single-family homes and condos that were bought and sold within a 12-month period.

While profits on flipped homes increased, speculators made slightly lower returns on their investments. Their typical return was 40.5%compared with 41.5% in 2019 and 46.4% in 2018. This was the lowest ROI since 2011.

Last year was a banner year for the U.S. housing market, with the apparent exception of the home-flipping business, which saw its fortunes slide a bit more in 2020,” said Todd Teta, ATTOM’s chief product officer, in a statement.

However, flippers earned more cash on their deals last year than previously. Homes renovated and resold by investors sold for a median $230,000 last year, netting investors profits of about $66,300. That was a 6.6% increase from last year and the most they had made since 2005.

(Profits were calculated by taking the median sales price and subtracting how much speculators originally paid for these properties. This did not include rehab, permit, labor, and other costs associated with the flip.)

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Watch: After a Year of the Pandemic, Here’s How the Real Estate Market Looks

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Where did home flipping rise and fall the most?

Home-flipping rates surged in a few parts of the country, including in the state of Connecticut. Flipping jumped the most in the metropolitan areas of Norwich, CT, at 38.2%. It was followed by Hartford, CT (31.1%); Boulder, CO (29%); Albuquerque, NM (26.9%); and Anchorage, AK (26.2%). Investors turned more homes in 72 of the 198 largest metropolitan areas with populations of at least 200,000 and a minimum of 200 flips.

(Metros are made up of the main city and surrounding towns, suburbs, and smaller urban areas.)

Flipping dropped the most in the Southern and Western regions of the country. The biggest falls were in the metropolitan areas of San Antonio, TX, where flips tumbled 27.3%; Tuscaloosa, AL (25.7%); Santa Rosa, CA (24.8%); Brownsville, TX (24.1%); and Houston (22%).

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