The number of single-family homes and condos that were flipped fell to 45,901 in the third quarter of 2018, down 12 percent compared with a year ago, and the lowest level since the first quarter of 2015. Homes that were flipped in third quarter represented 5.0 percent of all single-family home and condo sales during the quarter, down from a 5.2 percent rate in the previous quarter, and from 5.1 percent in the third quarter of 2017, according to the Q3 2018 U.S. Home Flipping Report from Attom Data Solutions.

"Home flipping acts as a canary in the coal mine for a cooling housing market because the high velocity of transactions provides home flippers with some of the best and most real-time data on how the market is trending," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "We've now seen three consecutive quarters with year-over-year decreases in home flips. The last time that happened was in 2014 following the mortgage rate jump in the second half of 2013, but it's still far from the 11 consecutive quarters with year-over-year decreases in home flips extending from Q2 2006 through Q4 2008 and leading up to the last housing crash."

Average home flipping returns drop to 6.5-year low
Homes flipped in Q3 2018 sold for an average of $63,000 more than what the home flipper purchased them for, down from an all-time high average gross flipping profit of $68,000 in the first quarter and down from an average gross flipping profit of $65,000 a year ago to the lowest level since Q2 2016.

The average gross flipping profit of $63,000 in Q3 2018 represented an average 42.6 percent gross flipping return on investment, down from an average 44.1 percent gross flipping ROI in the previous quarter and down from an average 48.1 percent gross flipping ROI in Q3 2017 to the lowest level since Q1 2012 — a 6.5-year low.

Nearly one-third of home flips sold for $100,000 to $200,000
The share of homes flipped that were sold by the home flipper between $100,000 to $200,000 made up 31.6 percent of all transactions, while those flip sales that occurred on homes sold for more than $5 million saw the highest gross flipping return on investment of any price range.

Of the homebuyers across the country who change states, most plan to head to the Sun Belt. According to the State Migration Study from LendingTree, most of the 12.1 percent of homebuyers who move from one state to another—will head south.

More than two million new purchase mortgage loan requests for primary residences in all 50 states through mid-November 2018 to find the percentage of requests from residents who were looking to move across state lines.

The results reveal the most popular new locations for homeowners in each state, along with the states with the highest percentage of requests to move to other parts of the country.

The most popular states are as follows:

Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states. Of all purchase mortgage requests during the study’s period, it received 9.1 percent. For out-of-state movers, 12.4 percent of requests were for Florida. The Sunshine State has a long history of bringing in visitors and new residents, particularly retirees.

Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state. Michigan was the state with the second highest percentage of residents looking to move within its borders, at 91.3 percent.

Alaska has the most residents looking to move away. By contrast, Alaska had the lowest percentage, 75.2 percent, of residents looking to stay in state. The top destination was Washington state.

Most people looking to move out of state don’t want to go far. More than half of the most popular new destination states border the current state. But if they are looking to move cross-country, chances are it’s to Florida. Of the 20 states where the residents’ most popular new location doesn’t border their current state, 13 chose Florida.

A Moving Popularity Score Index analyzes destination states adjusted by population. South Carolina scored highest, 152, or 52% greater than suggested by its population. It was followed by Florida, 144; Delaware, 138; Georgia, 138; and North Carolina, 137. At the other end of the spectrum, homebuyers are least attracted to South Dakota, 64; Hawaii, 67; Minnesota, 71; California, 72; and New York, 74.

There was a decline in consumer applications for credit over the past 12 months, and an increase in rejection rates in 2018, compared with 2017.

That was expected given the decline in demand due to higher mortgage interest rates, the share of respondents who applied for a mortgage refinance during the past year was lower in 2018 than in 2017, according to the October 2018 SCE Credit Access Survey from the Federal Reserve. The survey provides information on consumers' experiences with and expectations about credit demand and credit access.

Rejection rates reported during 2018 rose for credit card applications and credit card limit extension requests, and also increased notably for mortgage refinance applications.

Another development is that there was no appreciable change in borrower-initiated account closings between 2017 and 2018, there was a sharp increase in the proportion of respondents who reported that a lender closed one of their accounts, most commonly a credit or store retail card, during the past 12 months. In October, 7.2 percent of those surveyed reported such a lender-initiated event, compared with 5.7 percent in October 2017 and 4.2 percent in October 2016. In fact, the 2018 figure is the highest rate reported since the start of our survey in 2013.

Looking ahead, the proportion of respondents who reported that they are somewhat or very likely to apply for credit over the next 12 months remained stable overall, with the exception of mortgage refinances for which fewer respondents expect to apply, when compared with expectations reported in 2017, and even more so compared with 2016.

Luxury home prices rose 3.2 percent year over year to an average of $1.7 million in the third quarter of 2018, according to Redfin. This is the lowest growth rate since the fourth quarter of 2016, when prices were up 1.1 percent from a year earlier.

The Redfin analysis tracks home sales in more than 1,000 cities across the country and defines a home as luxury if it is among the top 5 percent most expensive homes sold in the quarter. The average price for the bottom 95 percent of homes was $343,000, up 3.6 percent in the third quarter compared to a year earlier, but down from the second quarter's 5.1 percent growth rate.

"A great deal of the slowing price growth among luxury homes can be explained by the stock market, a strong indicator of luxury homebuyers' wealth, or at least their perceived wealth," said Daryl Fairweather, chief economist at Redfin. "The stock-market fluctuations that began last quarter likely caused some uncertainty among wealthy individuals, which has made luxury buyers more sensitive to price. The swings many people have been watching in their stock portfolios have only grown more frequent in recent weeks, so we expect this trend of slowing luxury home price growth to continue at least into the end of the year."

Luxury homes went under contract after an average of 65 days on market, eight fewer days than in the third quarter of last year and tied with the second quarter for the fastest pace on record since Redfin began tracking this metric in the first quarter of 2009. The market for non-luxury homes also sped up in the third quarter, with homes spending an average of 49 days on market, nine fewer days than last year.

"We have seen homes go under contract faster every year since 2015. Buyers are able to look at more homes more quickly in part thanks to real estate technology," said Fairweather. "For example, a potential home buyer can use Redfin's website to go on virtual tours, or immediately book a home tour using Redfin's book-it-now feature."

Luxury homes sold fastest in San Jose, Calif., where they found buyers in an average of 19 days, followed by Ashburn, Va. (23); Oakland, Calif. (28); Seattle (29); and San Francisco (44).

Biggest Gainers, Losers

Cities in Florida and Nevada saw some of the nation's largest increases in luxury home prices in the third quarter. In West Palm Beach, Fla., the average sale price for a luxury home shot up 54.5 percent over last year to $1.7 million. Luxury home prices were up 29.6 percent in Reno, Nev., 26.0 percent in Boca Raton, Fla., and 22.5 percent in Miami.

"There are a lot of people selling average/modest multi-million-dollar homes in the Bay Area and buying true luxury homes in Reno," said Jaime Moore, agent for Redfin. "Buyers coming from the Bay Area find themselves with strong purchasing power and are able to easily afford luxury homes in Reno."

The average price for a luxury home fell the most in Vero Beach, Fla., down 46.1 percent year over year last quarter. Prices for high-end properties also fell in St. Petersburg, Fla., (-16.8%); Fort Lauderdale, Fla., (-16.4%); Sarasota, Fla., (-8.4%); and Delray Beach, Fla. (-8.3%).

Sales Rise Anemic 3.2%

For luxury sales and supply trends, Redfin analyzed a group of homes priced at or above $2 million, rather than the top 5 percent of homes in each city. Sales of homes priced at, or above $2 million, were up 3.2 percent in the third quarter, the ninth consecutive quarter of sales growth, but the smallest rate of growth since early 2016.

The number of homes for sale priced at or above $2 million fell 6.0 percent year over year in the third quarter of 2018 compared to a year earlier. Interestingly, inventory of homes priced under $2 million is slightly increasing as of the third quarter, but the luxury market is still seeing a decrease in the number of homes for sale compared to a year earlier.