Percent of NJ home flips were down in 2021, but total flips and returns up
In a case of good news, bad news, the 2021 U.S. Home Flipping Report from ATTOM Data Solutions saw the total number of flipped homes increase by more than 25% over 2020 across the country, but gross profits continued a five-year downward trend.
Yet as with so many other things, New Jersey was not typical, according to Rick Sharga, ATTOM executive vice president of market intelligence, who said flippers in the Garden State made more for their efforts last year than the year prior.
"Despite the fact that on average, gross returns went down for flippers across the country, they were very, very strong in New Jersey, in fact went up a couple thousand dollars," Sharga said.
On the national scale, the gross profit per flip averaged $65,000 in 2021, down $2,000 from 2020, according to ATTOM. The 31% return on investment compared to the original acquisition price reflected that statistic's lowest level since 2008.
"On the flip side, I guess you could say, we saw that the percentage of profits dipped pretty significantly for people who were flipping homes," although Sharga added, "still making a good gross return on their investment."
The 323,465 single-family houses or condo units flipped around the country last year were the most since 2006, the report revealed.
Some local trends appeared troubling but may have been attributable to the overall hot housing market and lingering COVID foreclosure moratoriums.
In terms of the percentage of flips vs. number of total home sales, the Atlantic City metro area experienced a 73% decline in 2021, the second-largest dip in the nation behind Honolulu (83%). The Philadelphia metro declined 35.4%.
Inventory for flippers has shrunk, Sharga said, even as homebuying continues a near-pandemic-long winning streak.
"Individual investors, who are the primary fix-and-flip investors across the country, are citing that they're having more competition from traditional consumer homebuyers than they are from institutional investors," he said.
Sharga said New Jersey is actually one of the best places to flip a home right now, and that the numbers shouldn't throw people off.
That's because, as foreclosures normalize back to pre-pandemic levels, Sharga said the "public service" of fix-and-flippers snatching up distressed properties will resume.
"New Jersey went from being a state with relatively high levels of distressed property to virtually none, and I think that's one of the reasons the New Jersey numbers trended the way that they did," he said.