Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 41 ■ MECKTIMES.COM
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TUESDAY, OCTOBER 10, 2023
First-time homeownership surges: Half of all home buyers are making their first purchase Page 2
Construction employment rises in 45 states & D.C. from august 2022 to august 2023 Page 3
Swinerton expands Charlotte office to meet growing demand Page 4
MARGENAU: A special rule for widows and widowers Page 5
GOLDMAN: Racing ahead in your career? Better learn to drag your feet. Page 6
How a strong start to 2023 for Wall Street got knocked off course by soaring bond yields Page 7
Home flipping activity drops as profits rise across U.S. in second quarter ATTOM has released its secondquarter 2023 U.S. Home Flipping Report showing that 84,350 single-family homes and condominiums in the United States were flipped in the second quarter. Those transactions represented 8 percent, or one of every 13 home sales, during the months running from April through June of 2023. The latest portion was down from 9.9 percent of all home sales in the nation during the first quarter of 2023 and from 8.9 percent in the second quarter of last year. Despite the flipping rate remaining historically high, it dropped to nearly its lowest point since 2021. However, the report also reveals that even as flipping activity decreased, investor profits and profit margins both showed more signs of recovering from a slump that had slashed them by more than half in just two years. Both increased for the second quarter in a row, with investment returns climbing at the fastest pace since 2020, and raw profits spiking more than at any point over the past decade. The typical profit margin, while still far below peaks hit in 2021, rose almost five percentage points from the first to the second quarter of this year. Raw profits on typical flips, meanwhile, shot up 18 percent quarterly. The home-flipping profit improvement came amid a rebound in the broader U.S. housing market, which saw the single-family median home price spike
10 percent during the Spring buying season, after falling from the middle of last year to the early part of 2023. “Fortunes for investors who flip homes for quick profits are showing more signs of turning around after a long and unusual period when they went down while the rest of the market went up,” said Rob Barber, CEO for ATTOM. “However, the latest investment returns may not be substantial enough to cover the holding costs on typical deals. And it’s still too early to declare the profit downturn over, as much will depend on whether the second-quarter market surge keeps going or whether it retreats again like it did last year.” Among flips nationwide, the gross profit on typical transactions (the difference between the median purchase price paid by investors and the median resale price) increased to $66,500 in the second quarter of 2023. That remained down 35 percent from 102,063 in the second quarter of 2022 and still stood at one of the lowest points in the past five years. But it was up from $56,250 in the first quarter of this year. The typical gross flipping profit translated into a 27.5 percent return on investment compared to the original acquisition price in the second quarter of 2023. That also was still far below a highwater mark of 61 percent on medianpriced flips reached in the second quarter of 2021. But it was up from 22.9 percent in the first quarter of this year as well as
from a recent low of 22.3 percent hit in the fourth quarter of last year. Profits and profit margins continued to revive in the second quarter of 2023 as investors were able to take advantage of shifts in prices that went in their favor from the point when they were buying their properties to when they sold them. Specifically, the typical resale price on flipped homes increased to $308,500 in the second quarter, a 2.1 percent over the first quarter of 2023. That contrasted with a 1.6 percent decrease in median prices that recent home flippers were commonly seeing when they were buying their properties. The price shift – from a decrease to an increase - led to the improvement in profits and profit margins. The recent turnaround has at least temporarily reversed an unusual pattern of home-flipping fortunes running counter to the broader U.S. housing market. For the prior two years, flipping returns had mostly dropped despite prices and profits for traditional sellers, continuing to soar during an extended, decade-long boom period. Home flipping rates drop in almost 90 percent of nation Home flips as a portion of all home sales decreased from the first quarter of 2023 to the second quarter of 2023 in 168 of the 190 metropolitan statistical
PLEASE SEE HOME FLIPPING ON PAGE 3
“Corporate interior and multifamily opportunities continue to be in abundance, with healthcare and hospitality also vying for top positions in our pipeline.” Jared Hoeflich, Swinerton Carolinas.
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