Pittsburgh, Pa., had the highest rate of return on home flipping in the second quarter of this year, according to a report from Attom Data Solutions.
The report showed 53,638 single family homes and condos were flipped throughout the U.S. in Q2. Attom defined a home flip as “a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data.”
Flipped homes in Pittsburgh had an average return investment of 146.6 percent. Behind Pittsburgh, Baton Rouge, La., had an average return of 120.3 percent. Also in the top five were Philadelphia, Pa., with 114 percent, Harrisburg, Pa., with 103.3 percent, and Cleveland, Ohio, at 101.8 percent.
Honolulu, Hawaii, had the lowest average return of 17.8 percent. Also at the bottom of the list were Boise, Idaho, at 23.5 percent, Austin, Texas, at 36 percent, San Jose, Calif., with 27 percent, and San Francisco, Calif., at 27.1 percent.
Attom collected data in 950 counties, accounting for more than 80 percent of the U.S. population.
The national average profit for flipped homes was $67,516, representing a 48.4 percent return on investment, per Attom. The average return was down from 49 percent in the previous quarter. Returns peaked in Q3 2016 at 51.1 percent.
CNBC credited home renovation television shows for the rise in home flipping, turning “regular Joes and Joannas into real estate renegades.”
Daren Blomquist, senior vice president at Attom Data Solutions, told CNBC that home flippers are finding ways to stand out in an increasingly competitive environment.
“Many flippers are gravitating toward lower-priced areas where discounted purchases are more readily available — often due to foreclosure or some other type of distress,” Blomquist told CNBC. “Many of those lower-priced areas also have strong rental markets, giving flippers a consistent pipeline of demand from buy-and-hold investors looking for turnkey rentals.”
A separate study from WalletHub showed that El Paso, Texas, is the best city for flipping homes. Sioux Falls, S.D., ranked second and Fort Wayne, Ind., came in third. WalletHub analyzed 150 large U.S. cities across 22 indicators of market potential, including cost and quality of living.
Oakland, Calif., ranked last on the WalletHub list, preceded by Yonkers, N.Y. Honolulu was also in the bottom 10, ranking No. 140.