As profits continue to recover, real estate resale rates have increased for the second consecutive quarter. While investment returns remain low, they reached 30% nationwide for the first time in over a year. Real estate resale profits also hit their highest level since 2022.
IRVINE, CA – June 20, 2024 – ATTOM, a leading curator of land, real estate and property data, today released its U.S. Home Resales Report for Q1 2024. According to the report, 67,817 single-family homes and condominiums were resold in the United States during the first quarter. These transactions represent 8.7% of all home sales nationwide in the months from January to March 2024, or 1 in 12 homes.
The latest percentage is up from 7.7% of all U.S. home sales in the fourth quarter of 2023, marking the second consecutive quarterly increase. Meanwhile, the percentage is still down from 9.8% in the first quarter of last year.
As resale rates increased, the fortunes of investors who buy homes and flip them quickly continued to improve: The latest data shows that home flippers nationwide made an average 30.2 percent gross profit before expenses on homes sold in the first quarter of this year, marking rising profit margins in three of four quarters after six years of nearly uninterrupted declines.
Typical profit margins in the first quarter, based on the difference between the average purchase price and the average resale price for home flips, remained about 25 percentage points lower than their 2016 peak and within range that could easily be wiped out by expenses like renovations, mortgage payments and property taxes.
But that's up from both the fourth quarter of 2023 and from about 25% in the first quarter of last year, which was the lowest level in the past decade.
Meanwhile, gross profits from a typical property flip nationwide rose to $72,375, still down from a high of about $80,000 reached in 2022 but up from $65,000 in the fourth quarter of 2023 and about $10,000 higher than last year's low.
“The latest figures show that investors are still facing challenges in realizing significant profits after expenses,” said ATTOM CEO Rob Barber. Like other investors, they have faced turbulent times as the housing market boom has cooled over the past year. But looking at a year's worth of trends, there are clear signs that the property resale industry is starting to turn around and interest in the market is growing.”
The continued improvement in earnings and profit margins over the past year reflects an invigorated pattern of investors benefiting from favorable price movements between the time of purchase and the time of resale.
In the first quarter of 2024, the typical resale price for homes flipped nationwide rose to $312,375, a 4.1% improvement over the fourth quarter of 2023. This increase outpaced the 2.1% increase in median price that home flippers have typically seen in recent years when purchasing properties. Similar gaps have emerged each year, leading to improved quarterly and annual investment returns.
Home resale rates up in nearly 80% of the country
Of 173 U.S. metropolitan statistical areas with sufficient data for analysis, 134 MSA saw an increase in home resales as a percentage of total home sales (77.5%) from Q4 2023 to Q1 2024. Most of the declines were less than 2 percentage points. (We included metropolitan areas with populations of 200,000 or more, at least 50 home resales in Q1 2024, and sufficient data.)
Among these metro areas, the highest resale rates in the first quarter of 2024 were Warner Robins, GA (where resales accounted for 18.7% of all home sales), Macon, GA (17.1%), Fayetteville, NC (15.8%), Atlanta, GA (14.7%) and Memphis, TN (14.6%).
Outside of Atlanta and Memphis, the metros with populations of over 1 million had the highest resale rates in Columbus, Ohio (12.8%), Birmingham, Alabama (12.7%) and Kansas City, Missouri (12.1%).
The lowest home resale rates among metro areas analyzed in the first quarter were Honolulu, Hawaii (3.7%), Oxnard, California (5.3%), Naples, Florida (5.4%), Des Moines, Iowa (5.5%) and Seattle, Washington (5.5%).
Just over half of U.S. locations see an increase in revenue from a typical home flip
The median resale price of $312,375 for homes resold nationwide in the first quarter of 2024 generated a gross profit of $72,375 above the investor's median $240,000 purchase price. As a result, profit margins were typically 30.2% in the first quarter of 2024, up from 27.7% in the fourth quarter of 2023 and 25.3% in the first quarter of last year. However, the latest national figures are still well below the 56.3% level in mid-2016 and the more recent peak of 48.8% in 2020.
Of the 173 metro areas analyzed, 89 (51.4%) saw profit margins increase from the fourth quarter of last year to the first quarter of this year, and of those, 111 (64.2%) saw profit margins increase compared to the previous year.
The cities with the largest year-over-year increases in first-quarter typical profit margins were Reading, Pennsylvania (ROI increased from 56.7% in Q1 2023 to 124.9% in Q1 2024), Trenton, New Jersey (up from 22.7% to 64.2%), Harrisburg, Pennsylvania (up from 73.6% to 113.6%), Lynchburg, Virginia (up from 49% to 87.5%) and Columbus, Georgia (up from 41.8% to 80.1%).
Markets with the highest investment returns on a typical home flip completed in the first quarter of 2024 were concentrated in lower-priced areas of the Northeast, including Buffalo, NY (127.8% return), Reading, PA (124.9%), Pittsburgh, PA (120.6%), Scranton, PA (115.7%) and Harrisburg, PA (113.6%).
The metro areas with populations over 1 million with the lowest typical home resale returns in the first quarter of 2024 were Austin, TX (0.3%), Honolulu, HI (1.7%), San Antonio, TX (2%), Dallas, TX (5.3%) and Houston, TX (8.4%).
Investors are seeing the biggest net gains in more expensive regions of the West, South and Northeast.
The largest median priced home resale gross profits (in dollar terms) in Q1 2024 were concentrated in the West, South and Northeast regions, where most resale prices were above $400,000. Fifteen of the top 20 fell into this category, including San Jose, CA (average gross profit of $297,500, median resale price of $1.6 million), San Francisco, CA (profit of $280,000, median resale price of $1.1 million), San Diego, CA (profit of $190,750, median resale price of $926,500), Bridgeport, CT (profit of $175,000, median resale price of $50 million), and Oxnard, CA (profit of $162,000, median resale price of $929,500).
The South also dominated the other end of the spectrum with 16 of the 20 worst gross profits on median price transactions in the first quarter, but resale price ranges were more mixed. The lowest figures were in Jackson, Mississippi (a loss of $3,873 on a median resale price of $185,560), Killeen, Texas (a loss of $1,209 on a median resale price of $208,750), Austin, Texas (a gain of $1,178 on a median resale price of $427,725), San Antonio, Texas (a gain of $5,144 on a median resale price of $258,259), and Honolulu, Hawaii (a gain of $10,092 on a median resale price of $597,567).
Lump-sum cash investments by home resellers are stable
Nationwide, 63.8% of homes resold in Q1 2024 were purchased by investors with cash, roughly the same as 63.7% in Q4 2023 but down from 65.4% in Q1 2023. Meanwhile, 36.2% of homes resold in Q1 2024 were purchased with financing, down slightly from 36.3% in the previous quarter but up from 34.6% a year ago.
Among metro areas with a population of 1 million or more and sufficient data for the analysis, the cities with the highest percentage of homes purchased for cash and resold in the first quarter of 2024 were Buffalo, New York (82.2%), Detroit, Michigan (77.3%), Cleveland, Ohio (74.8%), Birmingham, Alabama (73.1%) and Pittsburgh, Pennsylvania (73%).
Nationwide, the average resale time has increased, but it is down from the previous year.
The average time from purchase to resale for home flips increased to 164 days in Q1 2024. This is up from 156 days in Q4 2023 but still down from 178 days in Q1 2023.
Investor resales to FHA buyers on the rise
Of the 67,817 homes resold in the U.S. in 1Q24, 11.2% were sold to buyers using Federal Housing Administration (FHA)-insured loans, marking a second consecutive quarterly increase. The latest percentage is up from 10.4% in 4Q23 and 10.7% in 1Q23.
Among metro areas with populations over 200,000 with at least 50 home resales in the first quarter of 2024, the cities with the highest percentage of properties resold to FHA buyers (typically first-time homebuyers) were Scranton, Pennsylvania (27.1%), Bakersfield, California (26.8%), Visalia, California (26.8%), Yuma, Arizona (25.9%) and Flint, Michigan (25.8%).
One-third of counties have a home resale rate of at least 10 percent.
Of the 902 counties nationwide with 10 or more home resales in Q1 2024, 284 (31.5%) had home resales account for 10% or more of total home sales. This is significantly higher than the 22.7% of all counties with sufficient measurable data in Q4 2023. Topping the list in Q1 this year were Cobb County (Marietta), GA (23.5%), Hickman County (suburban Nashville), TN (20.3%), Houston County (Warner Robins), GA (20.1%), Clayton County (suburban Atlanta), GA (19.6%), and Douglas County (suburban Atlanta), GA (19.5%).
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How to Report
ATTOM analyzed bill of sale data for this report. A resale of a single-family home or condominium is an arm's length transaction that took place in the same quarter as an arm's length transaction for the same property within the past 12 months. Average gross profit is the difference between the purchase price and the resale price (not including repairs and other expenses, which resale veterans estimate typically range from 20 to 33 percent of the property's renovated price). Gross profit was calculated by dividing gross profit by the original purchase price.
About ATTOM
ATTOM delivers premium property data to power products that improve transparency, innovation, efficiency, and disruption in a data-driven economy. ATTOM collects multi-source property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for over 155 million residential and commercial properties covering 99% of the U.S. population. A rigorous data management process involving over 20 steps validates, standardizes, and enriches real estate data collected by ATTOM, and assigns a persistent unique ID (ATTOM ID) to each property record. The 30 TB ATTOM data warehouse drives innovation across many industries, including mortgage, real estate, insurance, marketing, and government, through flexible data delivery solutions including ATTOM Cloud, bulk file licensing, property data APIs, real estate market trends, property navigator, and more. ATTOM also introduces AI-enabled solutions, the latest innovative solutions that make property data more accessible and optimized for AI applications.
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