Highest Profit Margins Found in Midwest and Northeast
by ATTOM STAFF
ATTOM, a leading curator of land, property data, and real estate analytics, released its first quarter 2025 U.S. Home Flipping Report showing that 67,394 single family homes and condominiums were flipped in the first quarter of 2025, accounting for 8.3% of all home sales from January through March.
The share of flipped properties, as a percentage of all sales, rose to 8.3% from 7.4% the previous quarter. But it was down slightly compared to the same time last year when flips accounted for 8.7% of all sales.
The buying slowdown also appears to be affecting home flippers. The 67,394 homes and condos flipped nationwide during the first three months of the year marked the lowest number in a quarter since 2018.
Returns have also been falling, with the typical flipped home netting a 25% return on investment (before expenses) in the first quarter of 2025. That was down from 28% in the previous quarter and continued a gradual decline from the recent high of 48.8 in the fall of 2020.
Gross profits on a typical flipped home, the difference between the median purchase and median resale price for home flips, were down to $65,000 from $70,000 in the fourth quarter of 2024. The typical investor paid $260,000 for a home they flipped in the first quarter of 2025 and sold the property for $325,000.
“The competitive home market means high prices, which is good for short-term investors on the selling end,” said Rob Barber, CEO at ATTOM. “But that dynamic is also making it harder to find under-priced homes to buy up and it’s ultimately squeezing profit margins for the industry.”
“It’s tricky to balance at times when the market looks like it could take a downturn,” he added. “Investors don’t want to buy a property when prices are high and then see them drop before they’re ready to sell.”
Home flipping shrinks annually in two thirds of major markets
Home flips, as a share of total sales, rose quarter-over-quarter in 76.3% (132) of the 173 metropolitan statistical areas with sufficient data to analyze. However, the share was down compared to the same time last year in two thirds (115) of the metro areas. Metro areas were included if they had a population of 200,000 or more and at least 50 home flips in the first quarter of 2025.
Among the metro areas analyzed, home flippers accounted for the biggest share of sales in:
» Macon, GA (flips compromised 21% of all home sales)
» Warner-Robins, GA (20.6%)
» Atlanta, GA (15.9%)
» Memphis, TN (14.7%)
» Akron, OH (13.3%)
Besides Atlanta and Memphis, the metro areas with populations over 1 million that had the highest proportion of flips were:
» Birmingham, AL (12.8%)
» Kansas City, MO (11.6%)
» Salt Lake City, UT (11.1%)
Of those biggest metro areas, the smallest proportion of flips was in:
» Honolulu, HI (4.7%)
» New Orleans, LA (4.9%)
» Seattle, WA (5.5%)
» Pittsburgh, PA (5.9%)
» Portland, OR (6.1%)
Home flipping returns down annually in more than half the metro areas
A home flipped in the first quarter of 2025 sold for a nationwide median of $325,000, netting a 25% return on investment and a $65,000 gross profit over the $250,000 median purchase price.
Profit margins were down quarter-over-quarter in 45.7% (79) of the 173 metro areas in ATTOM’s analysis and down annually in 63% (109) of the markets.
The metro areas with the biggest quarterly declines in flipping profit margins were:
» Spartanburg, SC (Return on investment down from 160.2% in fourth quarter 2024 to 31.3% in first quarter 2025)
» Ocala, FL (down from 125% to 50.6%)
» Chattanooga, TN (down from 125.6% to 81.3%)
» Lynchburg, VA (down from 69.2% to 31%)
» Johnson City, TN (down from 82.1% to 44.5%)
Among metro areas with populations over 1 million, the biggest quarterly profit margin drop offs were in:
» St. Louis, MO (ROI down from 49.3% in fourth quarter 2024 to 27.3% in first quarter 2025)
» Fresno, CA (down from 51.3% to 37.8%)
» Pittsburgh, PA (down from 108.7% to 100.4%)
» New York City, NY (down from 44.2% to 36.1%)
» Chicago, IL (down from 52.6% to 44.8%)
Only 26% (45) of the 173 metro areas analyzed posted typical flipping profit margins (before expenses) over 50%, with the most lucrative markets located in the Midwest and Northeast.
The areas with the largest return on investment in the first quarter of 2025 were:
» Buffalo, NY (102.1% ROI)
» Pittsburgh, PA (100.4%)
» Scranton, PA (89.9%)
» Peoria, IL (89.1%)
» Rockford, IL (87.7%).
Aside from Buffalo and Pittsburgh, the metro areas with populations over 1 million that had the largest flipping profit margins were:
» New Orleans, LA (76.5% ROI)
» Memphis, TN (69.7%)
» Philadelphia, PA (69.6%)
The large metro areas with the smallest profit margins were:
» Austin, TX (1% ROI)
» Dallas, TX (3.7%)
» Houston, TX (5%)
» Salt Lake City, UT (6.5%)
» San Antonio, TX (6.9%)
Less expensive homes most profitable for flipping
Metro areas where the typical flipped home cost investors less than $225,000 to purchase tended to give the best returns on investment. The median profit margin in those lower-end metro markets was 46.4%.
In metro markets where the median purchase price before a flip was between $225,000 and $400,000, the median ROI was 22%, while in areas where homes initially cost flippers more than $400,000, the median ROI was 19%.
About two-thirds of flipped homes bought with cash
Nationwide, 62.2% of all homes flipped during the first quarter of 2025 were purchased with all cash, down slightly from 63.4% the previous quarter but pretty much the same as the same time last year. Flippers purchased the other 37.8% of homes with the help of financing.
The metro areas where flippers purchased the highest share of homes entirely with cash were:
» Rockford, IL (81.6% of flipped homes)
» Toledo, OH (81.2%)
» Buffalo, NY (81.2%)
» Cape Coral, FL (81.1%)
» Naples, FL (81.1%)
Average time to flip nationwide increases
The average time it took from purchase to resale on home flips increased slightly from 157 days in the fourth quarter of 2024 to 164 days in the first quarter of 2025. However, the latest figure was down from 178 days in the second quarter of 2023.
