The number of homes for sale in North Texas has more than doubled from last year as investors take advantage of rising home prices in the region.
Investors sold a record 2,675 single-family homes and apartments in Dallas and Fort Worth in the first quarter, about 13% of all sales in the area. new data from Attom Data Solutions. The number of flips was about 133% more than in the first quarter of 2021.
These homes typically bought for $297,830 and sold for $342,500, according to Attom, for a gross profit of $44,670 per fins, not counting repair or other expenses.
Upside down houses in North Texas were typically 1,802 square feet and were built in 1992.
Attom defines a home letting as a property that has had multiple transactions in the last 12 months.
Nationwide, resales accounted for about 10% of all home sales, and gross returns for investors fell to their lowest level since 2009. Nearly two-thirds of the homes sold were purchased with cash.
Dallas-Fort Worth was one of the few US markets where margins increased 11% year-over-year.
“The good news for fix-and-resale investors is that demand from potential homebuyers remains strong, as evidenced by this quarter’s report, which shows that one in every 10 homes sold during the first quarter was a resale. said Rick Sharga, Executive Vice President. marketing information for Attom, in a statement. “The bad news is that rising mortgage rates are starting to slow home price growth, and buyers have become more selective and less likely to outbid other buyers for their property of interest. This has a predictable impact on earnings. profit for investors.
AT separate reportKukun said low inventories and strong U.S. price increases may have encouraged speculators to join in, holding homes only for resale and not renovation.
This report pointed to several signs of speculation. It turned out that the Flippers had made little or no return above the overall increase in house prices, that more homes were being sold in shorter periods of time, and that the Flippers had applied for building permits at nearly the lowest rate on record in the first quarter. As of March 2022, only 14% of lasts in Dallas and Fort Worth have applied for permits for their property, according to Kukun.
“While not definitive, we believe this is one of the first signs of speculation in the US housing market since the Great Recession,” Kukun said in the report, noting that some fins may have entered the market with the intention of refurbishing. but a shortage of contractors and materials may have prompted them to take on smaller, permit-free projects.
Home resale companies are growing rapidly. Irving-based New Western has bought more than 40,000 homes across the country to sell to flippers since it was founded in 2008 and said it plans to expand from 40 to 80 this year. Backflip, a Dallas-based startup with an app that helps members buy homes to renovate, launched to the public this month after receiving $35 million in funding.
At 52%, Tarrant County ranks third in the nation for the proportion of homes bought by investors, businesses or corporations in the past year, according to a report from the National Association of Realtors. Last year, such organizations purchased 45% of houses in Rockwall County, 43% in Dallas County and 39% in Denton County.