Philly metro remains a hotbed for house-flippers

Flipped houses made up nearly 8% of home sales in the Philly metro last year, according to a recent report by real estate data firm ATTOM.

Why it matters: While house-flipping can improve conditions in some of Philly's most blighted neighborhoods, some say the practice primarily benefits developers and fuels gentrification.

• Revitalizing disadvantaged neighborhoods inflates property taxes for residents living on fixed incomes or earning wages near the poverty level, forcing them to sell homes their families have owned for generations at low prices to opportunistic speculators who make millions off the flips.

Between the lines: ATTOM analyzed sales deed data, defining single-family home or condo flips as "any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months."

Zoom in: Philly metro investors flipped 5,623 properties in 2023, a 15.2% increase from the previous year, per the report.

• That's about 60% above the area's house-flipping levels from a decade ago.
• Nearly two-thirds of flipped houses in the Philly area were purchased with cash.
• It took an average of six months to sell properties.

Zoom out: Metro Philly made up more than 60% of Pennsylvania's 9,188 house flips last year, per the report.

Flashback: The Philly region hit a peak number of house flips in 2005 when there were more than 8,100, per the report.

By the numbers: Cash buyers bought about a quarter of flipped homes last year.

• House flippers in the Philly area bought homes for a median price of $175,000 and sold them for a median price of $305,000, per the report.
• Those sellers grossed about $130,000 in profit per flip.

The big picture: In 2023, house flipping activity nationwide dropped 29.3%, the biggest annual decline since 2008, according to the report.

• The return on investment, at 27.5% nationally, hasn't been this bad since 2007. The ROI was down from 28.1% in 2022 and 35.7% in 2021, Axios' Brianna Crane reports.

The intrigue: Four Texas metros — Austin, Dallas, San Antonio and Houston — saw the weakest home-flip returns in 2023 among cities with at least 1 million in population, including a 4.1% loss in Austin, per ATTOM's report.

What's next: If they can beat investors, buying a fixer-upper is one way for wishful homeowners to squeak out a deal in some U.S. markets.

• In Philadelphia, buying a house that needs some work could save $96,400, per a recent StorageCafe study.