Tri-Cities home flipping market softer in 2018, but not by much


House flippers are some of the unsung heroes of the local housing industry. Last year they accounted for just under 10% of the region’s home sales. And most of those homes were sold below the median single-family or townhome resale cost and well below the median new home price. That puts flippers four-square in the affordable housing business of this group of entrepreneurs.

Over half of the homes flipped last year were at least 30 years old.  The median purchase price ranged from $43,950 in Greene County to $80,000 in Johnson City, and the vast majority of them were cash sales. The median sales price ranged from $86,612 in Carter County to $134,000 in Johnson City. The average time to flip ranged from 169 days in Hawkins County to 190 in Sullivan and Carter counties.  The Gross profits ranged from $22,500 in Carter County to $55,550 in Sullivan County.

The media image of flippers is popularized by some of the reality TV shows, a.ka. real estate porn.  In that idealized world, a flipper buys a house, knocks down some walls, installs new cabinets and counters and gussy ups the floors and goes to market. The buyers get a big value deal, and the flipper walks away with a pocket full of cash.  File the image right up there with “the check’s in the mail” and “I’m from the government, and I’m here to help you.”

There were 578 flips in the Tri-Cities last year, according to Attom Data Solutions’ year-end flipping report. In all likelihood, there were more because only Bristol VA showed up on Attom’s report. That’s understandable, a lot of what happens in SW Va. falls off the radar screen since their numbers are so small.

Attom’s report shows the number of homes flipped last year dropped to a seven-year low and accounted for 5.6% of all single-family and condo sales. In Tennessee, flips represented 7.9% of sales and was down 24.9% from the peak year in 2006.

Flips were also down from their peak years in both of the Tri-Cities two Metropolitan Statistical Areas the decline is not as big as what the report shows on the U.S. and state level.

The peak year in the Kingsport-Bristol MSA was 2007 with 309 flips. Last year there were 303.

The Johnson City MSA’s peak year was 2006 with 323 flips. Last year there were 251.

When you look at the gross return on investment by MSA, local flippers did better than those on the national level.  Gross returns were best in Kingsport-Bristol at 73.8% and 67.9% in Johnson City compared with 44.8% on the national level. The Tennessee gross ROI was 74.9%.

The gross ROI was down from 2017 in Kingsport-Bristol, but up in the Johnson City MSA.

When you drill down to the zip code level, the numbers are all over the place.

The best gross ROI was in Greeneville’s 37745 (141%) while the highest median gross profit of $73,000 was in Johnson City’s 37615.

The most flips were in Kingsport’s 37660 (54) and Bristol ‘s 37620 (52). The fewest number of flips was in Blountville (13).

Flips in Elizabethton’s 37643, Church Hill’s 37642 and Rogersville’s 37857 accounted for the highest share of total sales.

 



Categories: CORE DATA, REAL ESTATE

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