WINSTON-SALEM, N.C. (WGHP) – Metro Winston-Salem was one of the country’s hottest markets for home flipping – buying, updating and quickly selling a residence – during the third quarter of the year, a new report tells us.
ATTOM, a real estate data collector in California, found that Winston-Salem ranked fourth, with flips representing 12.7% of all sales of homes and condominiums in the three months ending Sept. 30.
Among metro areas with at least 200,000 population and 50 flips during the quarter, only Phoenix (13.7%), Spartanburg, South Carolina (13.3%), and Atlanta (12.9%) were more active than Winston-Salem. Gainesville, Georgia (12.6%), was fifth.
ATTOM reported that 92,422 single-family houses and condominiums were flipped in the third quarter, which represented about 7.5% of all sales. That’s down from 8.2% in the second quarter and a record 9.7% in the first quarter but up from 5.9% in the third quarter of 2021.
North Carolina as a whole saw 9.2% of its home sales related to flipping, which was down by 7% from last quarter but up 15% from last year.
There were 4,457 flips statewide in the third quarter, with an average sale price of $300,000 and a $60,000 profit margin, or 25% of the purchase price.
It took about 159 days to flip a house – or between five and six months – which was four days fewer than the national average but about 3 weeks longer than a year ago.
“This is a classic good news/bad news report for fix-and-flip investors,” said Rick Sharga, executive vice president of market intelligence at ATTOM, said in the report. “While flipping activity in the third quarter was among the highest on record, gross profits and profit margins declined significantly, reflecting the overall pricing weakness in today’s housing market.”
ATTOM reported gross profits from those flips in the third quarter reached their lowest point in almost three years, the fastest quarterly pace since 2009, to a point not seen in 13 years.
The average gross profit – which is calculated as the difference between the median price paid and the median sale price – was $62,000, which was 18.4% lower than the second quarter ($76,000) and 11.4% less than a year ago ($70,000).
ATTOM says that in the third quarter of 2022 the national resale price of a flipped house was $310,000, down 5.5% from the second quarter but up 6.9% from a year ago ($290,000).
That was because of the price-change gap between buying and selling. But North Carolina – and the Piedmont Triad – held up much better than the national rates.
In the Triad and NC
ATTOM only measures counties that have reported 10 or more flips in the third quarter, which meant eight of the 14 counties in the Triad and 61 or 100 statewide being broken down for evaluation.
Among the 4,300 flips in the third quarter listed in those 61 counties, Gaston County reported a state-best 16% of all sales being flips. In the Triad, there were 859 in those eight counties, with Davidson County reporting 14% of its sales from flips, which was even more than Forsyth’s 13.6%.
Davidson was down 2% from last quarter but up 71% from last year. Every county posted an increase from last year, but only Alamance, Forsyth and Surry improved from last quarter.
Guilford County had 296 of those flips, and Forsyth had 280, which was a 12% increase year over year but down 7% from Q2.
Alamance County had the highest gross profit from flips in the second quarter ($96,455), but Rockingham County had the highest percentage of the gross profit (127.5%), showing the average purchase price of its 31 flips to be $52,753 and the resale average of $120,000.
Davie County, which saw a 51% decrease in flips, posted 123 days for a turnaround, the briefest average in the quarter, but that was nearly 50% longer than a year ago. Only in Guilford County was the turnaround approaching as quick as it was in 2021 (137 days, an increase of four).
Around the state, the biggest quarterly increase in flips was in Martin County (63% – and 318% from last year), and Davie’s 51% was the biggest quarterly decrease. Watauga County (27%) had the greatest year-over-year decline.
The average profit in the state was $79,921, which was about 12.5% less than a year ago. Dare County had the highest average profit ($224,500 on a median sale price of $734,500), and in Columbus County there was a $5,000 loss on average.
Compare that to the Triad, where those flips averaged a profit of $67,978, up about 25% from last year.
The flip rates decreased in 132 of 194 metropolitan statistical areas around the U.S. that were analyzed by ATTOM. Most of those decreases were by less than two percentage points.
Aside from Phoenix and Atlanta, the largest flipping rates among metro areas with a population of more than 1 million were in Memphis, (12.1%); Jacksonville, Florida (11.8%); and Tucson (11.4%). The smallest were Honolulu, (1.6%); Davenport, Iowa (3.7%); and Rochester, New York, Ann Arbor, Michigan, and Bridgeport, Connecticut (4% each).