In 2023, the number of home flips dropped by almost one-third compared to the previous year, a new report from ATTOM revealed.
A total of 308,922 single-family homes and condos in the U.S. were flipped last year, down 29.3% from 436,807 in 2022, which marks the largest annual drop since 2008. This is according to the property database’s 2023 U.S. Home Flipping Report, which shows that flips as a portion of all home sales dipped from 8.6% in 2022 to 8.1% last year.
"In 2023, the landscape for home flipping across the U.S. became increasingly challenging," ATTOM CEO Rob Barber said. "Whether the overall market has soared or seen just modest gains in recent years, investors have missed out on the action. The sharp decline in the number of home flips likely reflected a combination of a tight supply of homes for sale as well as dwindling returns. Either way, it will take some significant reworking of the financials for home flipping fortunes to turn back around."
Gross profits on typical home flips in 2023 dropped to $66,000 from $70,100 nationwide, translating to a 27.5% return on investment compared to the original acquisition price.
ATTOM analysts noted that margins for home flippers had already been declining several years prior, even when the broader housing market was booming. As that happened, the profit gap between investors and all sellers gradually widened.
Home flipping rates fell the most in the southern and western U.S., with the 25 largest decreases in annual flipping rates in those regions.
