House flipping is fading fast. Across the country only 31,000 single family homes were flipped — purchased and resold within 12 months — during the second quarter, accounting for just 4.6 percent of all U.S. home sales, according to RealtyTrac. That's down from 5.9 percent in the first quarter and 6.2 percent during the same period last.
In Minnesota, 3.2 percent of all closings were flips, down from 4.3 percent during the previous quarter and 10.9 percent last. Those flips garnered an average $83,000 gross profit, an above average 51.9 percent return.
Nationwide, investors averaged a gross profit of more than $46,000 per flip, a 21 percent gross return on investment. That's down from 24 percent during the previous quarter and 31 percent last year - the peak in percentage return on flips since RealtyTrac began collecting their data.
“Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013,” said Daren Blomquist, vice president at RealtyTrac. “Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to.”
As I reported in a story in the Sunday paper, mortage foreclosures are nearing pre-recession levels, giving house prices a major boost. This week, CoreLogic gives us another glimpse into the situation with a report on mortgage delinquencies, which have been steadily falling since the beginning of the economic recovery. In May, the delinquency rate was nearly a full percentage point lower than last year and nearly half the national average - just 2.37 percent of all mortgages were 90 days or more late compared with 4.44 percent nationwide.
As the numerous construction cranes that dot the Minneapolis skyline suggests, the city is in the midst of a development boom fueled by a steady economic recovery. If you're interested in getting a better understanding of the many facets of the city's economy, click here to see "Minneapolis Trends," a 44-page quarterly review of socioeconomic and housing data. Below is an exerpt that focuses on housing.
Dream homes and distressed sales helped propel Minnesota's busiest real estate agents to the top of their class last year, according to an annual survey by Real Trends, a Denver-based real estate research company, and Trulia.com. That survey is completely voluntary, but is vetted to make sure that agents aren't over-reporting sales. Here's a link to the complete list of top agents/teams in Minnesota, but here are top three in each category.
Top agents by volume
Top agents by transactions
Top teams by volume
Top teams by transactions
After months of discouraging signals, a flurry of monthly reports released this morning offer some positive news for the housing market. Here's a summary:
Long-awaited good news for the housing recovery: After several months of declines, existing home sales across the country rose 4.9 percent from April to May - a stronger-than-consensus gain, according to a monthly report from the National Association of Realtors and Wells Fargo Securities. Sales were down five percent compared with last year.
That national report, which is seasonally adjusted, doesn't include local data, but earlier this month we reported that home sales (not seasonally adjusted) in the Twin Cities increased nearly 26 percent from April to May, though May sales were11 percent lower than last year.
Trends of note:
We'll have the latest local data on July 14 when we report the June homes sales for the Twin Cities metro.