Study finds that D-FW’s home-flipping activity has more than doubled from last year

The number of inverted homes in North Texas more than doubled a year ago as investors benefit from the area’s growth in home prices.

Investors flipped a record 2,675 family homes and apartments in Dallas-Fort Worth in the first quarter, accounting for about 13% of all sales in the region, according to new data from Attom Data Solutions. The number of volatility was about 133% more than in the first quarter of 2021.

These homes were typically bought for $297,830 and sold for $342,500, which translates to a total profit of $44,670 for the fins — not counting renovations or other expenses — according to Attom.

The upside-down estate in North Texas was typically 1,802 square feet and was built in 1992.

Attom defines home volatility as characteristics that have experienced multiple transactions over the past 12 months.

Nationally, volatility accounted for about 10% of all home sales, and gross margins for investors fell to their lowest level since 2009. Nearly two-thirds of inverted homes were purchased with cash.

Dallas-Fort Worth was one of the few markets in the US that saw an increase in margins, which were up 11% from a year ago.

Rick Sharga, Executive Vice President, said: “The good news for investors dealing with repairs and reversals is that demand remains strong from potential home buyers, as evidenced by this quarter’s report, which shows that one in 10 homes sold during the first quarter was as a reflection. from market information for Atom Corporation, in a statement. “The bad news is that higher mortgage rates are starting to slow home price increases, and buyers are becoming more selective – and less willing to outbid other buyers of properties they are interested in. This has an expected impact on profit margins for investors.”

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In a separate report, data firm Kukun said lower inventory and robust price growth across the US may have caused speculators to join in, holding on to homes simply to resell rather than refurbish.

This report referred to several Signs of speculation. It found that Fin saw little or no returns above the general estimate of home prices, that more homes were being flipped over in shorter periods of time and that Fins applied for building permits near the lowest rate on record in the first quarter. As of March 2022, only 14% of Flippers in Dallas-Fort Worth have applied for permits on their property, according to Cocoon.

“Although this is not definitive, we believe these are some of the first signs of speculation in the US housing market since the Great Recession,” the Cocoon report said, noting that some of the fins may have entered the market with the intention of renovation but this lack of contractors and perhaps The materials prompted them to pursue smaller projects that did not require permits.

Companies that focus on home flipping are growing fast. Irving-based New Western has bought more than 40,000 homes across the country to sell fins since it was founded in 2008 and said it plans to expand its presence from 40 to 80 locations this year. Backflip, a Dallas-based startup with an app that helps members buy homes to renovate, launched to the public this month after securing $35 million in funding.

Tarrant County ranked third nationwide with 52% in terms of the share of homes purchased by investors, businesses or institutions last year, according to a report from the National Association of Realtors. Last year, these entities purchased 45% of homes in Rockwall County, 43% in Dallas County, and 39% in Denton County.

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