Hello, future homeowners and savvy investors! It's Peter Cutile here, bringing you the freshest insights from the real estate market. Today, we're looking at the vibrant housing landscape through the lens of home flipping, where opportunities continue to unfold in Portland, Oregon, and Vancouver, Washington.
According to ATTOM, a renowned curator of real estate data, the first quarter of 2023 saw 72,960 home flips across the US, accounting for 9% of all sales. Despite a marginal drop from 9.4% in Q1 2022, this marks a notable increase from 8% in the last quarter of 2022, reaching the second-highest point this century.
But how do profits look in the flipping business? Well, they're climbing, albeit slowly. The first quarter of 2023 witnessed an improvement in both profits and investment returns from Q4 2022. This 22% profit margin signifies a faint glimmer of hope for investors who've weathered nearly three years of steady decline.
While flipping profits reached an average of $56,000 in Q1 2023, marking an upturn of 4.7% from the previous quarter, they're still 20% lower than Q1 2022 figures. Likewise, while typical returns on investment rose to 22.5% from 21.7% in Q4 2022, they're still a long shot from the impressive 51.5% recorded in mid-2020.
On a brighter note, the rise in resale prices on flipped homes (up 1.7% from $300,000 in Q4 2022 to $305,000 in Q1 2023) shows signs of turning the tide for home flippers. This moderate profit rebound defies the broader market trends, where investment returns were dropping for three years despite soaring prices for traditional sellers amid a decade-long market boom.
As for flipping rates, 74% of US metro areas witnessed an increase from Q4 2022 to Q1 2023. Among these, Macon, GA, Atlanta, GA, Jacksonville, FL, Memphis, TN, and Clarksville, TN saw the highest flipping rates. However, the brightest sparks of opportunity lie in our beloved Pacific Northwest. Portland and Vancouver continue to offer enticing prospects for both first-time buyers and seasoned investors.
With raw profits still at their highest in the South and Northeast, we're seeing a surge of investor activity in Portland and Vancouver. And despite the apparent risks in flipping, such as Austin, TX, Phoenix, AZ, and Ogden, UT reporting losses, our local markets stand out as resilient and profitable.
Additionally, the trend of all-cash investing holds strong, with 66.1% of homes flipped in Q1 2023 purchased by investors with cash. The rest were bought with financing, signifying the importance of versatile financial strategies in real estate investment.
The national home-flipping scene is teeming with promise, especially in Portland and Vancouver. So whether you're dreaming of a new home or planning your next investment, remember that with patience and astute market understanding, you can seize the opportunities amidst these challenging times.
Whether you're a first-time buyer seeking an entry-level home, a growing family needing more space, or a seasoned investor exploring new ventures, remember, I am here to guide you through your real estate journey in Portland and Vancouver. Let's discover your dream home or next investment opportunity together.
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