Thread by @housing_alex

Results from our survey of #FixAndFlip investors are in. The fix-and-flip market is clearly cracking: higher rates have shrunk the # of buyers + the # feasible deals. Buyers are also cautious about overpaying given falling prices (cutting into flipper margins).

COMMENTARY🧵->

#Atlanta flipper: “Much higher risk environment due to rising rates. Sellers still have not reset expectations from earlier this year, so acquisitions have essentially come to a halt.” (2/19)

#Baltimore flipper: “The market for fix and flip has turned. It is now a buyer's market and there are a lot of investors competing for the same property. I have put in several offers on a few properties that have good potential but have not been able to get the contract.” (3/19)

#Charlotte flipper: “Higher prices for purchases and rising inflation/rates are hurting our ability to acquire homes. We are seeing weaker ARV, tighter margins, longer hold periods due to contractors, and delays. The market is unbearable for small/mid-sized flippers.” (4/19)

#Dallas flipper: “The market is being flooded with new listings every day.” (5/19)

#FortCollins flipper: “Last year's market and even the first 5 months of 2022 are way different than June. Buyers do not qualify as much, and cost of goods have risen SIGNIFICANTLY! Sellers will have to keep their homes or accept less then they think they are worth.” (6/19)

#Jacksonville flipper: “In my market, the sale price and the after-repair-value (ARV) are way out of line with what we have seen the market bearing. That makes it more challenging to purchase, make the repairs, and make a profit.” (7/19)

#LosAngeles flipper: “Homes went pending in just a few days in Q1. In Q2, days on market have gotten progressive higher. Offers are coming in well below ARV.” (8/19)

#Naples flipper: “Interest rates are slowing us down.” (9/19)

#RiversideSanBernardino flipper: “The market has slowed down. Homes used to sell in hours; now it’s taking 2 weeks.” (10/19)

#SaltLakeCity flipper: “The market is stagnant with lots of homes and buyers that won't pay the asking price. I won't buy unless I can get the home for under 65% after-repair value (ARV). In Q1, I would have paid up to 75% of ARV.” (11/19)

#SanDiego flipper: “We are no longer using after-repair value (ARV) based on homes sold in 1H22. 1H22 was a bidding war-type market and buyers will not pay those prices now. We are using more conservative comps now.” (12/19)

#SanFrancisco flipper: “Home prices are coming down. There is less gravy on the flips unless you get great prices and better seller expectations.” (13/19)

#Sarasota flipper: “I’m still seeing above-average sale prices in Sarasota, but outside the area I see the market leveling off.” (14/19)

#Seattle flipper: “My homes purchased earlier this year will be sold at breakeven or a loss.” (15/19)

#SpartanburgSC flipper: “We have noticed a slowdown over the last 3-4 months.” (16/19)

#Tacoma flipper: “Rates of course are having an impact and softening demand. I think we're in the FUD (fear, uncertainty, and doubt) phase right now and things will settle down.” (17/19)

#Tampa flipper: “Sellers still feel this is a market where sellers call the shots - not anymore. It is still a seller's market, but prices have to be in line with expectations or they sit. Far too many are priced too high and the after-repair values (ARVs) are too high.” (18/19)

#WashingtonDC flipper: “Higher interest rates are the main reason for slowing.” (19/19)