Tampa Bay's house flipping fever has cooled but there are still plenty of flips in dozens of local ZIPS.
In the first three months of 2017, the number of flips and the average return on investment dropped both locally and nationwide compared to the same period a year earlier, according to a new report by ATTOM Data Solutions, parent company of RealtyTrac.
Flippers in one Tampa Bay ZIP Code area actually lost money on average, and those in some other ZIPS barely made enough to cover their costs. That's partly because home prices continue to rise even for fixer-uppers — a trend that has prompted more and more flippers to borrow money for their deals instead of using cash.
"The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued compared to a year ago and average home flipping returns decreased for the second consecutive quarter," said Daren Blomquist, ATTOM's senior vice president. "Home flippers financed an estimated $3.5 billion during the quarter" — the highest amount since 2008.
A flip is defined as a home bought and resold in an arm's length transaction in a 12-month period.
In the four-county Tampa Bay area, the number of flips in January, February and March plunged to 1,281 from 1,604 in same period a year earlier — a 20 percent drop. Still, Tampa Bay ranked sixth among metro areas, and almost one out of every 10 bay area homes sold in the first quarter of this year was a flip.
The bay area ZIP with the highest flipping rate was Plant City's 33563, which ranked 36th nationally among the more than 1,300 U.S. ZIPS with at least 10 flips in the quarter.
In that part of Plant City, which spans both sides of Interstate 4, 22.5 percent of homes sold were flips. That's three times more than the national average. Flippers paid a median of $100,000 and resold for $135,000.
Also ranking relatively high —150th — was Port Richey's 34668 with a 16.7 percent flip rate. As the Tampa Bay Times reported Sunday, the same ZIP also had the most sales of any bay area ZIP in the first three months, thanks in part to a large stock of smaller, modestly priced homes of the type many flippers can still afford.
In all, 46 Tampa Bay ZIPS had at least 10 flips in the quarter. Among the standouts:
Highest gross profit: St. Petersburg's 33704, which includes the sought-after Snell Isle, Old Northeast and Woodlawn areas. Flippers paid a median price of $165,500 and sold for $279,950 — a gross profit of $114,450.
Highest gross return on investment: Tampa's 33607, which includes most of West Tampa. There, flips cost a median of $80,650 and resold for $182,750, a 126.6 percent return. A close second with a 125 percent return was St. Petersburg's 33702. Flips in Meadowlawn, Fossil Park and other areas in that ZIP cost $58,750 and resold for $132,450,
Lowest return on investment: Tampa's 33629, which includes the pricey areas of Palma Ceia and Culbreath Isles. Flippers paid a median of $343,000 but sold for just $332,000 — a negative 3.2 percent return.
Lowest median price for a flip: Tampa's 33605, which includes Ybor City and other areas east of downtown Tampa. Flips there cost a median of $37,600 and resold for $73,500.
Fewest days to flip: Tampa's 33604, which include Sulphur Springs, the Lowry Park area and Old Seminole Heights. Flips there were bought and resold in an average of 143 days. Close runner-up was 33607 — West Tampa — at 145 days.
Nationwide, flips accounted for 6.7 percent of sales in the first three months of this year with an average gross return on investment of 47.4 percent. A third of all flips were financed.
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate.