RALEIGH – Nationally, the typical home âflippedâ by a real estate investor is generating 18% less gross profit than a year ago, or $ 67,000 gross profit for the typical home.
But in North Carolina, the increase in gross profit on the typical home bought, renovated and then resold by an investor was 16% and in the second quarter, the sample home in North Carolina generated gross profit of $ 68,500, which represents a return on investment of nearly 40%.
It depends new data from ATTOM Data Solutions, which WRAL TechWire received upon request. The dataset tracks properties purchased and then resold within 12 months of the end of the quarter in which the home was originally purchased.
In North Carolina, whether a typical property increases or decreases the gross profits or gross return on investment of this type of real estate investor depends a lot on one thing: where the property is located.
According to data from ATTOM Data Solutions, the typical Durham-Chapel Hill property generated a gross return 92% higher than a year ago, while typical returns were 82% higher in the Raleigh-Cary metropolitan area.
But that’s not the case everywhere in North Carolina, as typical investment returns have fallen 32% year over year in Greensboro-High Point, 67% in Wilmington, and 71% in Hickory. .
In Asheville, the typical second quarter 2021 home flip generated gross profit of $ 99,500, which increased ROI by 30% year over year. It also produced the highest gross profit of any market tracked in the data set.
The Durham-Chapel Hill properties generated a median gross margin of $ 94,500, and in Raleigh-Cary, the properties generated a median gross margin of $ 53,000.
âThe relative strength of local economies would, of course, be a key factor in investment decisions for domestic fins,â said Todd Teta, director of products at ATTOM Data Solutions. âA healthy or improving local economy means more people move in and more potential customers for renovated homes. So investors would certainly take this into account when deciding where to buy and where to sell. “
Now, investors can also view the data, as fins are not guaranteed to increase gross profit margins in all North Carolina markets, according to the data set. For example, the gross profits of a typical Greensboro-High Point flip are down 32% year-on-year, 67% in Wilmington and 71% in Hickory.
End of the real estate boom? Triangle prices drop in August but agents don’t panic
“Home-based profit margins in North Carolina generally reflected national trends, with five of the state’s nine metropolitan areas showing declining profit margins, measured year-over-year, in the second quarter of 2021,” Teta said. Nationally, about 70% of regions with enough data to be included in the company’s data set saw their profit margins or return on investment plummet during that time, Teta said.
âAt the same time, however, domestic fins have generated better profit margins than nationwide investors in the majority of North Carolina subways,â Teta said. “The typical flip generated more than the 33.5% national return in seven of the nine North Carolina subways measured.”
In terms of gross profit, the best performing real estate market for house pinball machines in North Carolina was in Asheville, where the typical home flip in the second quarter of 2021 generated gross profit of $ 99,500, up 30% year over year, and the highest dollar amount, on average, of any market tracked in the dataset.
The Durham-Chapel Hill properties generated an average gross profit of $ 94,500, and in Raleigh-Cary, the properties generated an average gross profit of $ 53,000.
Wilmington was among the top five markets tracked nationally by ATTOM Data Solutions where the turnaround occurred the least, as a percentage of all sales in the second quarter of 2021.
An earlier report from ATTOM Data Solutions identified the Triangle as a place where institutional investors were increasing their transaction activity, with 10.3% of transactions in Raleigh in the second quarter having been purchased by such an entity. What increase is it? According to the data set, 234%.
Both reports include activity from the iBuyer companies, which, according to an analysis by Zillow, accounted for 5% of all transactions in the Raleigh area, which included Wake, Franklin and Johnston counties, five times the national average over the markets where iBuyers operates.
Are we in the middle of a real estate bubble? At the event, the developers disagree.
The market remains competitive, despite fluctuations in the median residential real estate selling price, which fell month-over-month in August for the first time in 2021, to $ 351,000 on 4,337 sales from 4,192 sales closed in July 2021 with a median selling price of $ 355,000.
But market indicators still point to the Triangle facing a housing shortage, not the middle of a housing bubble, Jim Allen, chairman of the Jim Allen Group, said at a virtual event this week.
âThe prices are just starting to go up, I think it will take a decade to smooth out,â Allen said. âWe’re still very affordable, but don’t expect current prices to slow down anytime soon. “
And the indicators being tracked by agents back it up, Hunter Rowe real estate agent Courtney Brown told WRAL TechWire this week.
âFirst of all, we’re still in a strong market with low days on the market, very low inventory and still with 104% sale at list price,â Brown said. “I wouldn’t read that the slightly lower average selling price means we’re in a less competitive market.”
By another measure, a internal analysis From Redfin’s agent data, Raleigh is now considered the most competitive of the 48 markets tracked in the company’s data set. The analysis found that 86.7% of all offers written by a Redfin agent for a property in the area faced competition from other buyers, topping Silicon Valley by 16 percentage points.
And Zillow was recently released The Home Value Index measured an increase in home values ââin Raleigh, despite market data from TMLS indicating a decline in the median selling price. Zillow data measured a 3.6% increase in home values ââin Raleigh, with rent growth of 2.5% in the region, putting the average home value at $ 363,693, up 23 , 4% year on year.