The number of people trying to make a quick buck flipping houses hit an eight-year high last year. For good reason, too: Profits are at the highest level in a decade, and the return on investment is at the second-highest point since the turn of the century.
This comes as home prices have been steadily rising since bottoming out after the nadir of the housing bust in February 2012. Home values are nearly 31 percent higher, but are 4.9 percent off from the peak reached in July 2006.
Just over 110,000 sellers flipped a house in 2015, meaning they bought the house and sold it within 12 months, betting on increasing prices. That’s up 16 percent from the year before and the highest total since 2007, according to a new report Thursday from RealtyTrac.
Related: 12 States with the Hottest 2016 Housing Markets
The average gross profit from a flipped home in the U.S. totaled $55,000, the largest amount since 2005 when it was $58,750. The return on investment — the gross profit as a percentage of the original purchase price — was 45.8 percent, the second-highest since 2000. (ROI in 2013 was 46 percent.)
“As confidence in the housing recovery spreads, more real estate investors and would-be real estate investors are hopping on the home flipping bandwagon,” Daren Blomquist, senior vice president at RealtyTrac, said in a statement. “Not only is the share of home flips on the rise again, but we also see the flipping trend trickling down to smaller investors.”
Still, the number of flipped properties—both single-family homes and condos—remained just below the historic average since 2000 but was 13.4 percent higher than last year.
Not all markets are big winners for house flippers. For example, a flipped property in Detroit will only gross $22,050 on average from a property investment, the lowest of the 110 metros tracked by RealtyTrac and almost 60 percent lower than the national average. Likewise, an investor will get only an 18.2-percent ROI for a home in the Daphne-Fairhope-Foley metro area in Alabama, compared with the 45.8-percent average.
Related: Prices Are Rising. Why Aren’t There More Homes For Sale?
So where are the best places to invest in flipping homes? Here are the metro areas that offer the biggest gross profits and the biggest returns on investment.
Biggest profit
10. Baltimore
$91,542 gross profit
9. Washington, D.C.
$96,000
8. Honolulu, Hawaii (urban)
$96,346
7. Seattle
$99,000
6. San Diego
$102,500
5. Ventura, Calif. (includes Thousand Oaks)
$110,000
4. Los Angeles
$115,000
3. New York
$120,000
1. San Jose, Calif. (tied)
$145,000
1. San Francisco (tied)
$145,000
Related: Here’s a Part of the Housing Market That’s Really Booming
Biggest return on investment (ROI)
10. Jacksonville, Fla.
79.9 percent ROI
9. Allentown, Pa.
80 percent ROI
8. Knoxville, Tenn.
81.2 percent ROI
7. York, Pa.
83.6 percent ROI
6. Baltimore
84.8 percent ROI
5. New Haven, Conn.
89.6 percent ROI
4. Cincinnati
89.7 percent ROI
3. Philadelphia
98.4 percent ROI
2. New Orleans
99.2 percent ROI
1. Pittsburgh, Pa.
129.5 percent ROI
