Home flipping is still hot. Need proof? Just turn on HGTV—chances are there’s a show about flippers on right now, adding fresh paint and shiny new appliances to some home they bought on the cheap, hoping to rake in the profits at sale.
But as home prices across the nation continue to rise and the supply of lower-priced homes is drying up, some flippers are having to look for new places to find deals. And some of the emerging flipper hot spots aren’t where most folks would expect.
The market with the biggest increase in flippers last year was Buffalo, NY, which saw a 34% surge, according to a recent report from real estate data firm ATTOM Data Solutions. (The report included only metros with at least 1 million people.)
ATTOM looked at all single-family and condominium properties that were bought and then resold over a 12-month period. The firm included only 174 metropolitan areas where sufficient data were available.
“These markets are not the primary markets that many people would think of [for] investing in real estate,” says Daren Blomquist, senior vice president at ATTOM. “They’re more off the beaten path, so there’s less competition from other investors and there’s more availability for deals.”
Meanwhile, there were fewer flips in places such as Miami, where it fell by about 14%, and Los Angeles and Seattle, which were down 2%, as home prices are too high for many investors to get in on the market and make good profits, he says.
That’s why more investors are seeking out places such as Buffalo. Most of the flippers in Buffalo are locals seeking to cash in on the area’s revitalization and the improving housing market, says Chris Naugle, president of FlipOut Academy, a Buffalo-area school for potential home flippers. The market is particularly appealing to investors because rents are often higher than mortgage payments.