There are more likely to be extra flops than flips—that’s the conclusion flippers are coming to, in response to knowledge from John Burns Analysis & 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 yr in the past, and barely in comparison with Q1 of this yr.
Rising bills to purchase, repair up, and promote a home for a revenue, as soon as the acquisition worth, rates of interest, development, and holding prices are factored in, are mentioned 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 yr. “I feel what our clients are actually experiencing, it actually comes right down to housing velocity and turnover timelines,” Arvind Mohan, CEO of Kiavi, advised 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 Development Has Damage Flippers
Actual property analytics and knowledge analysis firm ATTOM’s Q1 report confirmed a downward pattern in flipping, which has continued all year long. The overall 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 elements of the Southwest experiencing a extra pronounced gross sales decline in comparison with flippers elsewhere, indicating that the Sunbelt development increase had an affect. On the identical time, the fee and availability of housing, in addition to labor shortages, have been points in Northern California.
“Flippers in these areas face rising resale provide, vital competitors from homebuilders, and rising prices (notably insurance coverage),” Thomas wrote within the JBREC + Kiavi report.
Landlord Numbers Are Down, a Bellwether for Flippers
Different elements are additionally affecting home flipping numbers. In April, Redfin discovered that there have been 500,000 extra sellers than patrons nationwide, the largest imbalance in over a decade, which elevated competitors amongst flippers. A extra current Redfin report confirmed that investor landlords within the second quarter fell to their lowest springtime degree since 2020, down 6% from the identical quarter a yr earlier.
Redfin senior economist Sheharyar Bokhari mentioned in a press launch:
“For actual property buyers, the numbers simply don’t pencil out the way in which they did a number of years in the past, whether or not they’re trying to flip a house or hire it out. It prices so much to purchase a house, and potential returns are concurrently softening. That doesn’t imply buyers are disappearing—they’re nonetheless shopping for practically one in 5 properties within the nation—however they’re being choosier about their dwelling purchases, similar to particular person homebuyers.”
Condominium Gross sales Have Tanked
The difficulty of rising insurance coverage prices can’t be overstated. It’s a compelling purpose for potential patrons of flipped properties to think about renting as an alternative.
Investor condominium gross sales are down 13% yr over yr within the second quarter, in response to Redfin knowledge, 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 going through potential patrons, notably within the Sunbelt states.
John Tomlinson, a Redfin Premier agent in Fort Lauderdale, Florida, mentioned in Redfin’s press launch:
“The condominium market is the slowest I’ve seen in no less than a decade. Consumers are cautious of placing provides on condos—and plenty of are cancelling contracts after they’ve made provides—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, loads of insurance coverage corporations received’t cowl condominium buildings on the coast, and a few mortgage lenders are quoting increased charges for condos. When you’re an investor, you possibly can’t depend on being profitable from a condominium proper now.”
Redfin knowledge 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 nicely.
The Northeast Wants a Makeover
Simply because flipping numbers are down in elements of the Sunbelt doesn’t imply there aren’t any alternatives anyplace. The median age of a U.S. house is 41 years as of 2023, up from 31 years in 2005, in response to the Nationwide Affiliation of Dwelling Builders, which paints an optimistic future for flippers, contradicting current 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, in response to the Federal Reserve Financial institution of Philadelphia.
Winter is approaching, so extra homes are more likely to fall into disrepair, with cash-strapped householders more and more unlikely to cowl the prices.
Philly’s Housing Plight
“It’s the proper chaos for a storm for maintenance” of properties, Angela D. Brooks, Philadelphia’s chief housing and concrete growth officer, advised the Washington Publish of the plight going through Philadelphia’s housing. “You’ve got individuals who get pleasure from having the ability to afford a home, or perhaps they inherited it, however they don’t fairly have the cash to do even primary programs restore.”
In lots of instances, the properties are uninhabitable and ripe for flippers, ought to the present homeowners take into account promoting attributable to unaffordable restore prices. It raises questions on housing provide and affordability of newly constructed properties.
“Individuals have adjusted to residing in situations that different folks could be appalled at,” Emily Schapira, president of The Philadelphia Vitality Authority, advised the Publish. “Anybody can get into this case, and we’ve got seen that may be true throughout each neighborhood and revenue spectrum, as a result of deferred upkeep is hard.”
Ultimate Ideas: Methods for Flippers in a Difficult Market
A number of elements are at present contributing to the decline in flipping that will not be straight associated to the necessity for housing, however moderately to the price of offering it. Days on market are rising, which not solely means that there may be extra competitors from different flippers, but in addition that patrons are struggling or unwilling to tackle the mortgage for a transformed dwelling.
There are a number of methods to sort out this.
Keep away from worth drops by pricing realistically for at the moment’s market
Bidding wars are yesterday’s information. Value drops solely delay the inevitable, maintaining the property lingering available on the market and dropping its shine. Aggressive pricing will entice extra provides and allow you to recoup your income extra rapidly.
Larger-end finishes deliver extra provides
This could appear apparent, however the JBREC + Kiavi survey discovered that properties with superior finishes obtained extra provides.
Undergo your flip with a fine-tooth comb to restore moderately than substitute the place mandatory, so you possibly can afford so as to add the wow issue to the finishes.
Make the most of a complete advertising marketing campaign
Social media sells homes lately. Create snappy quick movies on all platforms, and use a specialist to get your itemizing far and broad. A superb 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. Nonetheless, 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 scale back prices by shopping for in bulk and specializing in including the razzle-dazzle to kitchens and loos. The survey revealed that the ROI was higher for flippers who consider these areas, in comparison with those that deal with whole-house renovations.
There’s no straightforward technique to overcome the shortage of high quality, inexpensive, and reliable labor. Discovering a contractor with a steady crew that isn’t beneath 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 offered. 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 usually are not accessible to you, be even handed in your homebuying choice. Select high quality over amount and lower-cost properties to attraction to a better variety of patrons.