The Sarasota-Manatee region is no longer one of the nation’s hot spots for home flips.
Home flippers locked up fewer sales and pulled in smaller profits last year in Southwest Florida.
In the Sarasota-Manatee region, 5.1% of home and condo sales during 2019 were considered flips — an arms-length sale for the second time within 12 months — according to a new report from real estate researcher ATTOM Data Solutions.
Those 1,117 flips were down by 3.4% from 2018.
Flippers also made less money on their deals. The median gross profit on a 2019 flip was $58,400, or $1,350 less than the previous year.
Home flipping nationwide rose 2% over the year to the highest point since 2006, but profit margins fell 3%, with a gross profit of $62,900.
“Home-flipping profits across the U.S. dropped again in 2019 as the business of buying and selling houses absorbed its worst year since the housing market was mired in the fallout from the Great Recession,” said Todd Teta, chief product officer at ATTOM. “This happened as the cost of buying properties continued to rise faster than gains on resale.
“That’s not to say that the home-flipping industry is tanking or losing its allure for investors, because home flipping rates are higher than they’ve been in eight years. But profits did continue to decline again for investors,” he said.
Sarasota-Manatee was once one of the nation’s busiest locations for flipping, peaking with 1,352 such deals in the second quarter of 2005 during the real estate run up.
But the region now ranks 121st out of the 190 major U.S. metro areas studied in the report, well off the ninth-place ranking it held four years ago.
Home flipping did pick up in the final three months of the year in the Sarasota-Manatee region. They accounted for 5.5% of all sales, an increase of 14% from the third quarter and 4% over the year. The gross profit also was higher at $66,450.
For the year, local investors averaged a 33.8% gross return on investment — which does not include rehab costs and other expenses — on their flips, compared with 37.3% last year.
Flipped homes and condos here sold for a median $231,000 in 2019.
Cash buyers, who played a key role in the rebound of the region’s real estate market, acquired nearly four out of every 10 locally flipped homes sold last year. It took 196 days on average to flip a property.
Statewide, home flips accounted for 6.8% of all home and condo sales in 2019, up by 5% over the year to rank 10th highest in the U.S.