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Profits are shrinking for home flippers as high home prices and construction costs dig into flippers’ income. But home flipping is still increasing, according to data from realtor.com®.
“There is opportunity, but you’ve really got to be smart in where you purchase and know that market,” Charles Tassell, CEO of the National Real Estate Investors Association, told realtor.com®. “Finding the right spot is the hard part right now.” A home flip is defined as a property resold within 12 months of its last purchase.
More than 59,000 sales were considered home flips across the U.S. from April to June, the highest level since 2005, according to realtor.com®’s data. But profits are down in the majority of metros: Flippers made their lowest profits since 2008.
“The overall cost of renovation projects has gone up substantially, and that’s also impacted profitability,” Tassell says.
Realtor.com® looked at the median profit for home flips in the 150 largest metro areas compared with a year ago. The following markets topped the list of best places to flip a home:
1. Columbia, S.C.
- Median list price in September: $275,000
- Median profit on a flip: $61,667
- Median profit percentage change: 7.9%
2. Phoenix
- Median list price in September: $475,000
- Median profit on a flip: $85,500
- Median profit percentage change: 7.7%
3. Dallas
- Median list price in September: $396,500
- Median profit on a flip: $71,383
- Median profit percentage change: 6.6%
4. Raleigh, N.C.
- Median list price in September: $427,250
- Median profit on a flip: $46,333
- Median profit percentage change: 6.2%
5. Columbus, Ohio
- Median list price in September: $289,500
- Median profit on a flip: $76,733
- Median profit percentage change: 6.2%
View the worst places to flip a house on realtor.com®’s list.