Dive Brief:
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Homes that were purchased, rehabbed and resold within a year accounted for 4% of all single-family home sales in the first quarter of 2015, according to RealtyTrac.
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Although "flipping" is at its lowest level since the second quarter of 2011, the return on the homeowner’s investment is at its highest since 2011, RealtyTrac reported. In the first quarter, the difference between the initial purchase price and the resale price of flipped homes averaged $72,450, up from $65,290 in the fourth quarter of last year.
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Flippers in Baltimore, Detroit and several Florida beach communities pocketed the greatest profits during the first quarter. Affordable housing markets with a lot of vacant houses and homes in foreclosure yielded the highest return on investment for flippers.
Dive Insight:
"The strong returns for home flippers in the first quarter demonstrates that there is still a need in this recovering real estate market for move-in ready homes rehabbed to more modern tastes, particularly given the dearth of new homes being built," Daren Blomquist, RealtyTrac vice president, said in a release. He noted that in a housing market with tight inventory, even flippers might face a challenge in the coming months as they search for distressed homes for sale.