The average return on investment for house flippers of single-family homes and condos in the third quarter fell to the lowest average gross flipping ROI since the second quarter of 2015, according to Attom Data Solutions.
Homes flipped in in the third quarter yielded an average gross profit of $66,448, marking a 47.7% average ROI for flippers, down from 51.2% during the same period last year and from 48.7% from the previous quarter.
Nationwide, 48,685 single-family homes and condos were flipped in the third quarter for a rate of 5.1%, which is unchanged from a year ago but down from 5.6% from the second quarter.
"Home flipping profits continue to be squeezed by a dwindling inventory of distressed properties available to purchase at a discount and increasing competition from fair-weather home flippers often willing to operate on thinner margins," said Daren Blomquist, senior vice president at Attom, in a press release.
"A more-than-nine-year low in the ratio of flips per investor is evidence of this increased competition, which is pushing many investors to new metro areas that often have weaker market fundamentals but also come with a bigger supply of discounted distressed properties to flip," he continued.
The home flipping rate in the quarter increased year-over-year in 44 of 93 analyze metropolitan areas, with Baton Rouge, La., Winston-Salem, N.C., Salem, Ore., Indianapolis and Buffalo, N.Y. leading in annual rate increases.
Some major markets where home flipping rates declined between the third quarters of 2016 and 2017 include Seattle, Minneapolis, Baltimore, Denver and Tampa, Fla.