Flip or Flop in Dallas-Fort Worth? Data Tells the Story, Plus Other Reports

The good news on house flipping: Profits are the highest in 20 years, including in the Dallas-Fort Worth area. The bad news: Fewer are doing it, although you can’t be sure what with all the house-flipping shows on TV, such as the Vanilla Ice Project.

Except for the Vanilla Ice part, those findings are part of Attom Data Solutions’ study on house flipping. The study looked at the third-quarter numbers associated with buying and reselling homes within 12 months.

The main takeaway: House-flipping profits in the Dallas-Fort Worth area increased by more than $10,300 from a year ago to an average profit of $54,926, about a 28 percent gain. Nationwide, the typical U.S. return on investment (gross profit) was $73,766, a 44.4 percent gain.

Brownsville registered a nation-best 182.9 percent profit margin. Central Texas is the place to be for a solid return on investment. In Austin, house flipping produced a profit margin of 176.6 percent. In Waco, perhaps inspired by Chip and Joanna Gaines’ Fixer Upper renovation efforts on HGTV, it was up 157.4 percent. On the other hand, Texas did have one of the nation’s sharpest ROI declines. Corpus Christi was down 77 percent.

The decline in the number of house flips is to be expected with the inventory shortage of homes for sale and a competitive housing market in which flippers are competing against low bids.

The data backed those factors. House flips were down in 90 percent of U.S. metro areas in the third quarter of 2020, according to the Attom Data Solutions report.

Of the 1,168 homes sold in D-FW in the past year, 4.4 percent were flipped. That represents a 29-percent decrease from the second quarter of this year and down 15 percent from the third quarter of 2019.

Compared with other Texas markets, San Antonio had the best percentage with 4.8 percent flips. Houston had 3.7 percent and Austin 3.2 percent.
Of 160 metro areas ranked, D-FW’s flip rate was 104th. D-FW had its best flipping year in the second quarter of 2006. Nationwide, home flipping dropped 8 percent year over year to 57,155 single-family homes and condos.

“This all happened in the context of the pandemic, which has created unusual circumstances for the housing market to thrive, and that has included the home-flipping business,” Todd Teta, ATTOM Data Solutions’ chief product officer, told CNBC. “Too much is uncertain these days to say whether the latest trends will continue. But for now, the prospects continue looking up for home flipping after a period when they were trending the opposite way.”

Maybe that’s good news for Vanilla Ice, the Dallas-born rapper who reinvented himself as a reality-show home-flipper. His show is in limbo, but with maybe with more homes to flip, his show will get renewed.

Other Notable Reports

• RENTCafé Year-End Report: Dallas saw 7 percent fewer rental applications and 13 percent fewer renters who applied to move within the city as compared to 2019, according to the RENTCafé Year-End Report. Also, 4 percent fewer renters chose to move to Dallas while 5 percent decided it’s time to leave the city. Who’s leaving? 60 percent are millennials with 61 percent headed for a different urban area. Apartment rent in Dallas went up 0.3 percent compared to 2019, reaching an average of $1,247. In comparison, the national average rent declined by 0.5 percent. Read more here.

• Zumper Dallas Metro Report: Speaking of rent, Dallas has the most expensive rent for a one-bedroom in November, according to Zumper’s Dallas Metro Report. Dallas came in at $1,250 for a one-bedroom, slightly ahead of Farmers Branch’s $1,240. Third-place Frisco saw its rents increase by 1.7 percent. The least-expensive one-bedroom can be found in Mesquite at $840. Read more here.
• Lending Tree: Only 1.56 percent of Dallas-area homeowners left to buy homes in smaller towns, according to Lending Tree Inc. Nationwide, 2.2 percent of homebuyers left a metro area for the small town. Elsewhere in Texas, only 1.52 percent moved from Austin, 1.41 percent from San Antonio, and 1.05 percent from Houston. Read more here.
• S&P CoreLogic Case-Shiller Home Price Index: Dallas-area home prices have risen 6.5 percent, according to the S&P CoreLogic Case-Shiller Home Price Index’s October report. Nationwide, home prices were up 8.4 percent from 2019 levels. Read more here.