An Oak Cliff neighborhood has wound up on the list of the country’s hottest home-flipping markets.
But with the housing market cooling in many areas of the country, total home flips across the U.S. are at their lowest level in more than three years, according to a new report from Attom Data Solutions.
Home flips — quick property sales by investors or fixer-uppers — declined 12 percent in the third quarter from a year earlier. And profits from the sales were at a 6.5-year low.
“This is another sign that the market is cooling off,” said Attom Data’s top economist and senior vice president, Daren Blomquist. “Flippers are a lot of times on the forefront of recognizing when the market is slowing down, and they will be some of the first to pull back.
“It started in the first quarter of this year, and this is the third consecutive quarter we have seen a year-over-year decrease in the number of home flips,” he said. “They recognize that it is a more risky market to flip in.”
About 5 percent of the home sales in the Dallas-Fort Worth area in the third quarter were flips, Attom Data’s research says.
D-FW home flips were down 4.3 percent from the third quarter of 2017 and totaled almost 900 — still enough to rank North Texas as the 10th-busiest home-flipping market in the country.
But D-FW had less than half as many home flips as the top markets of Phoenix, New York City and Miami.
The average D-FW home-flip gross profit was $41,250 — less than the national average of $63,000.
The Dallas ZIP code 75224 in Oak Cliff ranked as one of the country’s top home-flipping neighborhoods, with 26.8 percent of its sales counted as flips.
Other North Texas ZIP codes with large percentages of flips were 75232 in southwest Dallas, 75216 in southern Dallas and 76117 in Haltom City, in Tarrant County.
Attom Data counts a flip as any arm’s-length sale of a single-family home or condo that occurs within 12 months of the last such sale of the same property.
The average flipped D-FW home in the third quarter sold for $228,750, for a gross profit of 22 percent.
About 60 percent of houses purchased for flips nationally were acquired for cash, Attom Data said.
On a percentage-of-total-sales ranking, the states with the highest home-flipping rates were Arizona (7.7 percent), Tennessee (7.5 percent), Nevada (7.2 percent), Alabama (6.6 percent) and Maryland (6.0 percent).
Only 4.1 percent of Texas home sales were flips, down from 6.3 percent in the third quarter of 2017.
Housing markets across the country — including in the D-FW area — are cooling this year as rising mortgage rates and years of big price gains have chased off some buyers.
North Texas home sales are flat from a year ago, and prices are up about 5 percent overall — about half the appreciation rate of 18 months ago.
“Transition is in some ways the most risky situation for a home-flipper,” Blomquist said. “They may be buying when prices are still going up, but when they get around to selling, the market has slowed down.”