There are more likely to be extra flops than flips—that’s the conclusion flippers are coming to, based on knowledge from John Burns Analysis & Consulting and Kiavi, a lender targeted on actual property investing. Their numbers present that home flipping exercise contracted sharply from the second quarter of 2025 in comparison with a 12 months in the past, and barely in comparison with Q1 of this 12 months.
Rising bills to purchase, repair up, and promote a home for a revenue, as soon as the acquisition worth, rates of interest, building, and holding prices are factored in, are stated to be accountable for the decline in exercise.
“Sentiment stays muted, as financial uncertainty, elevated mortgage charges, and rising resale stock weigh on demand for flipped properties,” Alex Thomas of John Burns Analysis and Consulting, the first writer of the report, wrote.
The index surveyed roughly 400 flippers and analyzed present gross sales, anticipated gross sales, and flipper exercise. There was a decline in all classes, whereas the variety of days on market elevated as new and current housing stock rose.
Solely 30% of flippers reported “good” gross sales, down from 38% the earlier 12 months. “I believe what our prospects are actually experiencing, it actually comes all the way down to housing velocity and turnover timelines,” Arvind Mohan, CEO of Kiavi, instructed CNBC. “They’re undoubtedly within the velocity enterprise, and so if it takes them an additional month to finish a transaction, that’s capital that’s tied up in that property that can’t essentially be freed up for the following funding.”
The Sunbelt’s Booming Building Has Harm Flippers
Actual property analytics and knowledge analysis firm ATTOM’s Q1 report confirmed a downward development in flipping, which has continued all year long. The entire variety of single-family properties and condos flipped between January and March was the bottom quarterly quantity since 2018.
Regionally, John Burns and Kiavi’s report noticed flippers in Florida, Northern California, and different components of the Southwest experiencing a extra pronounced gross sales decline in comparison with flippers elsewhere, indicating that the Sunbelt building growth had an influence. On the identical time, the associated fee and availability of housing, in addition to labor shortages, have been points in Northern California.
“Flippers in these areas face rising resale provide, important competitors from homebuilders, and rising prices (notably insurance coverage),” Thomas wrote within the JBREC + Kiavi report.
Landlord Numbers Are Down, a Bellwether for Flippers
Different elements are additionally affecting home flipping numbers. In April, Redfin discovered that there have been 500,000 extra sellers than patrons nationwide, the largest imbalance in over a decade, which elevated competitors amongst flippers. A extra latest Redfin report confirmed that investor landlords within the second quarter fell to their lowest springtime stage since 2020, down 6% from the identical quarter a 12 months earlier.
Redfin senior economist Sheharyar Bokhari stated in a press launch:
“For actual property traders, the numbers simply don’t pencil out the best way they did a couple of years in the past, whether or not they’re seeking to flip a house or hire it out. It prices lots to purchase a house, and potential returns are concurrently softening. That doesn’t imply traders are disappearing—they’re nonetheless shopping for almost one in 5 properties within the nation—however they’re being choosier about their house purchases, similar to particular person homebuyers.”
Rental Gross sales Have Tanked
The problem of rising insurance coverage prices can’t be overstated. It’s a compelling motive for potential patrons of flipped properties to think about renting as an alternative.
Investor condominium gross sales are down 13% 12 months over 12 months within the second quarter, based on Redfin knowledge, which is triple the decline for some other property sort. Condominiums, which include excessive HOA charges and particular assessments for upkeep, are emblematic of the headwinds going through potential patrons, notably within the Sunbelt states.
John Tomlinson, a Redfin Premier agent in Fort Lauderdale, Florida, stated in Redfin’s press launch:
“The condominium market is the slowest I’ve seen in at the least a decade. Consumers are cautious of placing gives on condos—and plenty of are cancelling contracts after they’ve made gives—as a result of prices have elevated a lot and so they’re nervous that they’ll proceed rising sooner or later. HOA charges are excessive, a number of insurance coverage firms gained’t cowl condominium buildings on the coast, and a few mortgage lenders are quoting larger charges for condos. If you happen to’re an investor, you may’t depend on making a living from a condominium proper now.”
Redfin knowledge reveals that investor exercise has declined by double digits in lots of Florida markets, however elevated in lots of West Coast markets, presumably a bellwether for flipping exercise as nicely.
The Northeast Wants a Makeover
Simply because flipping numbers are down in components of the Sunbelt doesn’t imply there aren’t any alternatives wherever. The median age of a U.S. house is 41 years as of 2023, up from 31 years in 2005, based on the Nationwide Affiliation of House Builders, which paints an optimistic future for flippers, contradicting latest stories from John Burns and Kiavi.
The best focus of older properties is within the Northeast, Mid-Atlantic states, and alongside the Appalachian Mountains. Restore prices are escalating, to the tune of $150 billion as of 2022, based on the Federal Reserve Financial institution of Philadelphia.
Winter is approaching, so extra homes are more likely to fall into disrepair, with cash-strapped householders more and more unlikely to cowl the prices.
Philly’s Housing Plight
“It’s the proper chaos for a storm for repairs” of properties, Angela D. Brooks, Philadelphia’s chief housing and concrete growth officer, instructed the Washington Publish of the plight going through Philadelphia’s housing. “You’ve individuals who benefit from having the ability to afford a home, or possibly they inherited it, however they don’t fairly have the cash to do even fundamental methods restore.”
In lots of instances, the properties are uninhabitable and ripe for flippers, ought to the present homeowners think about promoting attributable to unaffordable restore prices. It raises questions on housing provide and affordability of newly constructed properties.
“Folks have adjusted to dwelling in situations that different folks could be appalled at,” Emily Schapira, president of The Philadelphia Power Authority, instructed the Publish. “Anybody can get into this example, and we’ve seen that may be true throughout each neighborhood and revenue spectrum, as a result of deferred upkeep is hard.”
Closing Ideas: Methods for Flippers in a Difficult Market
A number of elements are at the moment contributing to the decline in flipping that will not be straight associated to the necessity for housing, however slightly to the price of offering it. Days on market are rising, which not solely means that there could be extra competitors from different flippers, but in addition that patrons are struggling or unwilling to tackle the mortgage for a transformed house.
There are a number of methods to deal with this.
Keep away from worth drops by pricing realistically for at this time’s market
Bidding wars are yesterday’s information. Value drops solely delay the inevitable, preserving the property lingering in the marketplace and dropping its shine. Aggressive pricing will appeal to extra gives and allow you to recoup your income extra shortly.
Increased-end finishes deliver extra gives
This could appear apparent, however the JBREC + Kiavi survey discovered that properties with superior finishes acquired extra gives.
Undergo your flip with a fine-tooth comb to restore slightly than change the place needed, so you may afford so as to add the wow issue to the finishes.
Make the most of a complete advertising and marketing marketing campaign
Social media sells homes nowadays. Create snappy quick movies on all platforms, and use a specialist to get your itemizing far and large. A superb agent ought to already be using this of their gross sales arsenal. See which one has probably the most important following and most gross sales.
Account for will increase in supplies and a lack of labor
The JBREC + Kiavi survey confirmed that renovation prices have reached an all-time excessive. Nevertheless, there are important disparities throughout the nation, with common renovation prices in Northern California, for instance, costing $136,000 per flip, in comparison with a modest $39,000 within the Northeast. Moreover, the survey revealed a labor scarcity.
Serial flippers may cut back prices by shopping for in bulk and specializing in including the razzle-dazzle to kitchens and bogs. The survey revealed that the ROI was higher for flippers who think about these areas, in comparison with those that give attention to whole-house renovations.
There’s no straightforward technique to overcome the shortage of high quality, reasonably priced, and reliable labor. Discovering a contractor with a steady crew that isn’t underneath the specter of deportation is invaluable. Lock them in with the promise of ongoing work and good pay.
Location issues
Flip in areas the place homes can be found and being offered. Information means that the Northeast, Midwest, and Southeast are the locations to be for flips, whereas smaller, extra reasonably priced markets are attracting residents drawn to a greater value of dwelling.
If these aren’t obtainable to you, be even handed in your homebuying choice. Select high quality over amount and lower-cost properties to attraction to a better variety of patrons.
