Markets & Economy

House flippers grow more cautious as price appreciation slows

RealtyTrac: Investors' return on investment rises to 30 percent

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Easing home price appreciation made home flipping less attractive to investor buyers in the first quarter, but rates of return on flips rose, according to the latest report from data aggregator RealtyTrac. Of all single-family home sales last quarter, 3.7 percent were flipped (sold again within six months after purchase). That's down from 4.1 percent in fourth-quarter 2013 and from 6.5 percent in first-quarter 2013, RealtyTrac said. But the average sales price of single-family homes flipped was $55,574 higher than the average original purchase price in the first quarter, bringing average gross profit per flip up 7.8 percent from $51,805 at the same time a year ago. That works out to an unadjusted return on investment (ROI) of 30 percent last quarter, compared with 28 percent in first-quarter 2013. "Slowing home price appreciation early this year in many of the most popular flipping markets put some investors in danger of flying too close to the sun," said Daren Blomquist,...