Across the country, home flips were down 8 percent from the previous quarter and 6 percent annually. But in the District they were up 10.7 percent from the previous quarter and up a whopping 32 percent year-over-year. Only Hawaii with its 36 percent jump had a bigger annual increase. Home flips in Maryland were up 8.5 percent from the previous quarter.
Daren Blomquist, senior vice president at ATTOM, says the uptick in foreclosure activity in both jurisdictions is leading to the increased number of home flips.
“I believe in both areas it’s remnants of the last crisis,” he said. “It’s not a new crisis. In the District, where there were all these delays, we’ve in the last year been seeing dramatic increases in foreclosure activity, which is a great pipeline for flippers. It’s a hot housing market. Prices are going up. There are neighborhoods gentrifying, which are areas that flippers look for.”
Most of the flipping in Maryland occurred in Prince George’s County.
“Maryland is a little bit ahead of the game in clearing out their backlog compared to the District,” Blomquist said. “It’s in the lower-priced areas of Maryland that we’re seeing a lot of flipping.”
Baltimore city and Baltimore County came in just below Prince George’s County for the highest rate of home flips, but Baltimore city was where flippers made the most money. Baltimore had an average gross flipping return on investment of 106 percent. (ATTOM looks only at the difference between what the property cost to purchase and its sale price. It doesn’t include the cost of renovation.) The average return on investment for Maryland was 79.3 percent. The District had a 58.3 percent profit margin. The national average was 47.4 percent.
“In D.C. what’s interesting, that discount up front is not as good, but because the market is so hot, they’re selling at a very nice premium,” Blomquist said.