Investors are flipping fewer homes in Nevada, but quick sales for profit in the state remain well above national norms.
Thursday numbers from Irvine, Calif.-based research firm RealtyTrac show that 8.1 percent of single-family homes sold statewide in the second quarter were flipped homes, or homes bought and then sold again within 12 months. That was down from a high of 11.7 percent in the fourth quarter, and 10.5 percent in the first quarter.
But the state’s flipping rate was nearly double the national average of 4.6 percent.
Nevada ranked No. 1 among states for its share of sales that involved home flips.
Yet, Nevada also had some of the poorest returns on flipped homes.
The average purchase price on a flipped home in Nevada in the second quarter was $195,649, while the sale price was $204,952. That made for an average gross profit of $9,304, and a gross return on investment of 4.8 percent.
Nationally, the average gross profit averaged more than $46,000, with a gross return of 21 percent.
RealtyTrac Vice President Daren Blomquist said Nevada’s return on investment was so much lower than average partly because steep investor competition has meant less of a buyer’s discount. Nationally, investors bought homes for flipping at an 8 percent price discount compared to average market values; in Nevada, there was no discount at all.
What’s more, investors aren’t upgrading the properties enough to sell them at a larger premium, Blomquist said.
And annual price appreciation has slowed in Nevada, dropping from 28 percent a year ago to 12 percent now.
“Flippers who bought last year counting on the 28 percent appreciation to continue are in for a rude awakening when they go to list their property this year,” Blomquist said.
Contact reporter Jennifer Robison at firstname.lastname@example.org. Follow @J_Robison1 on Twitter.