There are prone to be extra flops than flips—that’s the conclusion flippers are coming to, based on information from John Burns Research & 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 responsible 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 present 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 right down to housing velocity and turnover timelines,” Arvind Mohan, CEO of Kiavi, instructed CNBC. “They’re positively 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 Damage Flippers
Actual property analytics and information analysis firm ATTOM’s Q1 report confirmed a downward pattern in flipping, which has continued all year long. The whole 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 increase had an affect. On the similar time, the fee and availability of housing, in addition to labor shortages, have been points in Northern California.
“Flippers in these areas face growing resale provide, vital competitors from homebuilders, and rising prices (notably insurance),” Thomas wrote within the JBREC + Kiavi report.
Landlord Numbers Are Down, a Bellwether for Flippers
Different components are additionally affecting home flipping numbers. In April, Redfin discovered that there have been 500,000 extra sellers than consumers nationwide, the largest imbalance in over a decade, which elevated competitors amongst flippers. A extra recent 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 number of years in the past, whether or not they’re trying to flip a house or lease it out. It prices so much to purchase a house, and potential returns are concurrently softening. That doesn’t imply traders are disappearing—they’re nonetheless buying nearly one in five homes in the country—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 not be overstated. It’s a compelling cause for potential consumers of flipped properties to think about renting as a substitute.
Investor apartment gross sales are down 13% 12 months over 12 months within the second quarter, based on Redfin information, which is triple the decline for some other property kind. Condominiums, which include excessive HOA charges and particular assessments for upkeep, are emblematic of the headwinds dealing with potential consumers, notably within the Sunbelt states.
John Tomlinson, a Redfin Premier agent in Fort Lauderdale, Florida, stated in Redfin’s press launch:
“The apartment market is the slowest I’ve seen in no less than a decade. Consumers are cautious of placing affords on condos—and lots of are cancelling contracts after they’ve made affords—as a result of prices have elevated a lot they usually’re nervous that they’ll proceed rising sooner or later. HOA charges are excessive, a whole lot of insurance coverage firms received’t cowl apartment buildings on the coast, and a few mortgage lenders are quoting greater charges for condos. When you’re an investor, you possibly can’t depend on making a living from a apartment proper now.”
Redfin information 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 effectively.
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 National Association of Home 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 Bank of Philadelphia.
Winter is approaching, so extra homes are prone to fall into disrepair, with cash-strapped owners more and more unlikely to cowl the prices.
Philly’s Housing Plight
“It’s the right chaos for a storm for repairs” of properties, Angela D. Brooks, Philadelphia’s chief housing and concrete improvement officer, instructed the Washington Post of the plight dealing with 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 programs restore.”
In lots of instances, the properties are uninhabitable and ripe for flippers, ought to the present homeowners take into account promoting as a result of unaffordable restore prices. It raises questions on housing provide and affordability of newly constructed properties.
“Folks have adjusted to residing in circumstances that different folks can be appalled at,” Emily Schapira, president of The Philadelphia Vitality Authority, instructed the Put up. “Anybody can get into this example, and we have now seen that may be true throughout each neighborhood and earnings spectrum, as a result of deferred upkeep is hard.”
Remaining Ideas: Methods for Flippers in a Difficult Market
A number of components are at the moment contributing to the decline in flipping that will not be instantly associated to the necessity for housing, however moderately to the price of offering it. Days on market are growing, which not solely means that there is likely to be extra competitors from different flippers, but additionally that consumers are struggling or unwilling to tackle the mortgage for a reworked 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. Worth drops solely delay the inevitable, protecting the property lingering available on the market and shedding its shine. Aggressive pricing will appeal to extra affords and allow you to recoup your income extra shortly.
Increased-end finishes deliver extra affords
This could appear apparent, however the JBREC + Kiavi survey discovered that properties with superior finishes acquired extra affords.
Undergo your flip with a fine-tooth comb to restore moderately than substitute the place crucial, so you possibly can 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 as of late. Create snappy quick movies on all platforms, and use a specialist to get your itemizing far and huge. A great agent ought to already be using this of their gross sales arsenal. See which one has essentially the most vital 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 vital 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 might 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 focus on these areas, in comparison with those that concentrate on whole-house renovations.
There’s no simple method to overcome the dearth of high quality, inexpensive, and reliable labor. Finding a contractor with a secure crew that isn’t below the specter of deportation is invaluable. Lock them in with the promise of ongoing work and good pay.
Location issues
Flip in places the place homes can be found and being bought. Knowledge means that the Northeast, Midwest, and Southeast are the locations to be for flips, whereas smaller, extra inexpensive markets are attracting residents drawn to a greater price of residing.
If these are usually not obtainable to you, be even handed in your homebuying choice. Select high quality over amount and lower-cost properties to attraction to the next variety of consumers.
