Introduction
House flipping has become a popular investment strategy for real estate enthusiasts, offering the potential for significant returns. However, the success of a house-flipping venture heavily depends on choosing the right location. Factors such as median home values, market demand, renovation costs, and local economic conditions play a crucial role in determining the profitability of a flip. In this comprehensive guide, we’ll explore the top cities for flipping houses in 2024, providing insights into the key metrics that make these locations prime targets for investors.
Identifying the Best Cities for House Flipping
To identify the best cities for flipping houses, a thorough analysis of various factors is essential. Here are the key criteria we considered:
- Median Home Values: Affordable median home values are crucial for house flippers, as they provide an opportunity to acquire properties at reasonable prices, leaving room for renovation costs and potential profits. Cities with median home values below the national average were given preference.
- Median Days on Market: The median days on the market is an indicator of demand in the housing market. Cities with lower median days on the market suggest a faster turnover rate, allowing investors to flip properties quickly and maximize their returns.
- Median Household Income: A strong median household income is a positive sign for the local economy and can contribute to a healthy housing market. Cities with higher median household incomes tend to have more potential buyers, increasing the likelihood of a successful flip.
- Active Listings: An appropriate level of active listings is essential for house flippers. Too few active listings can indicate a shortage, leading to increased competition and higher prices, while too many active listings may signal an oversupplied market, making it challenging to sell flipped properties quickly.
- Unemployment Rate: Low unemployment rates typically indicate a thriving local economy, which can translate into higher demand for housing and better opportunities for house flippers to find buyers.
- Foreclosure Rate: A higher foreclosure rate can present opportunities for investors to acquire distressed properties at discounted prices, potentially increasing their profit margins.
READ ALSO: Building a Winning House Flipping Team: Roles and Responsibilities Explained
The Top 5 Cities for Flipping Houses in 2024
Based on our analysis, here are the top five cities for flipping houses in 2024:
- Cleveland, OH
- Chicago, IL
- Philadelphia, PA
- Jacksonville, FL
- Fayetteville, NC
Let’s take a closer look at each of these cities and what makes them prime targets for house flippers.
READ ALSO: Comprehensive Guide to Calculating House Flipping Costs: From Acquisition to Profits
1. Cleveland, OH Cleveland
Ohio, tops our list of the best cities for flipping houses in 2024. With a median home value of $104,666 and a foreclosure rate of 0.33%, Cleveland offers ample opportunities for investors to acquire distressed properties at discounted prices. Additionally, the city has a relatively low median days on the market of 57 days, suggesting a strong demand for housing.
Economic Factors:
- Median Home Value: $104,666
- Median Days on Market: 57
- Median Household Income: $33,678
- Active Listings: 2,490
- Unemployment Rate: 4%
- Foreclosure Rate: 0.33%
2. Chicago, IL Chicago
Illinois, is a prime location for house flippers due to its robust housing market and strong economic indicators. With a median home value of $291,186 and a foreclosure rate of 0.28%, investors can find attractive investment opportunities. The city’s median days on the market of 36 days indicates a high demand for housing, making it easier to sell flipped properties quickly.
Economic Factors:
- Median Home Value: $291,186
- Median Days on Market: 36
- Median Household Income: $65,781
- Active Listings: 13,966
- Unemployment Rate: 3%
- Foreclosure Rate: 0.28%
3. Philadelphia, PA Philadelphia
Pennsylvania, is an emerging market for house flippers, with a median home value of $221,032 and a foreclosure rate of 0.25%. The city’s median days on the market of 45 days suggests a healthy real estate market, making it possible for investors to flip properties efficiently. Additionally, Philadelphia’s active listings of 8,348 provide ample opportunities to find suitable investment properties.
Economic Factors:
- Median Home Value: $221,032
- Median Days on Market: 45
- Median Household Income: $52,649
- Active Listings: 8,348
- Unemployment Rate: 6%
- Foreclosure Rate: 0.25%
READ ALSO: The Ultimate Guide to Flipping Houses for Beginners in 2023
4. Jacksonville, FL Jacksonville
Florida, is a prime destination for house flippers, with a median home value of $295,177 and a foreclosure rate of 0.26%. The city’s median days on the market of 44 days indicates a high demand for housing, making it easier for investors to sell flipped properties quickly. Additionally, Jacksonville’s median household income of $58,263 suggests a strong local economy, which can attract potential buyers.
Economic Factors:
- Median Home Value: $295,177
- Median Days on Market: 44
- Median Household Income: $58,263
- Active Listings: 4,827
- Unemployment Rate: 3%
- Foreclosure Rate: 0.26%
5. Fayetteville, NC Fayetteville
North Carolina, rounds out our list of the top five cities for flipping houses in 2024. With a median home value of $200,361 and a foreclosure rate of 0.30%, investors can find attractive investment opportunities in this affordable market. The city’s median days on the market of 43 days suggests a strong demand for housing, making it an ideal location for house flippers.
Economic Factors:
- Median Home Value: $200,361
- Median Days on Market: 43
- Median Household Income: $48,923
- Active Listings: 984
- Unemployment Rate: 5%
- Foreclosure Rate: 0.30%
Conclusion
Flipping houses can be a lucrative investment strategy, but success heavily relies on choosing the right location. The cities highlighted in this guide – Cleveland, Chicago, Philadelphia, Jacksonville, and Fayetteville – offer a combination of favorable market conditions, affordable entry points, and strong demand for housing, making them prime targets for house flippers in 2024.
However, it’s essential to conduct thorough research, understand local market dynamics, and adhere to proven strategies to maximize the chances of a successful flip. By carefully evaluating market trends, adhering to guidelines like the 70% rule, and leveraging the insights provided in this guide, investors can position themselves for success in the competitive world of house flipping.
Remember, the real estate market is ever-evolving, and the best cities for flipping houses may change over time. Staying informed, adapting to market shifts, and maintaining a strategic approach are crucial for long-term success in this exciting investment arena.
Here are some authoritative and trustworthy links related to house flipping and real estate investing:
- ATTOM Data Solutions – A leading provider of property data and analytics for real estate investors and professionals.
- RealtyTrac – A comprehensive source for foreclosure properties and real estate data.
- Zillow Research – Provides insights and analysis on various real estate markets and trends.
- National Association of Realtors – The largest trade association for real estate professionals in the United States.
- BiggerPockets – A renowned online community and resource for real estate investors and house flippers.
By leveraging these authoritative sources and the insights provided in this guide, investors can make informed decisions and increase their chances of success in the dynamic world of house flipping.
Frequently Asked Questions (FAQs)
What are the best states to flip properties in?
While individual cities may offer excellent opportunities for house flipping, some states consistently provide a favorable environment for this investment strategy. Based on our analysis, Louisiana, Michigan, Alabama, Delaware, and Ohio are among the best states for flipping properties in 2024. These states offer a combination of affordable property prices, potential for high returns on investment, and a conducive market for property flipping.
Is house flipping still profitable in 2024?
Yes, house flipping remains a profitable venture in 2024. According to the latest ATTOM Data Solutions Home Flipping Report, the average gross profit on home flipping transactions reached an impressive $56,000 during the first quarter of 2024, translating to a substantial 22.5% return on investment (ROI) compared to the original list price of the properties.
However, it’s important to note that profitability is not guaranteed, and success in house flipping requires careful planning, strategic execution, and an understanding of the local market dynamics.
What is the 70% rule in house flipping?
The 70% rule is a fundamental guideline in house flipping that helps investors determine the maximum allowable offer (MAO) they should make on a property. This rule suggests that investors should not pay more than 70% of a house’s after-repair value (ARV) minus the estimated repair costs.
By adhering to this rule, investors aim to secure properties that leave room for potential profit after factoring in renovation expenses. The 70% rule safeguards against overpaying for properties, which could erode potential returns.
In another related article, Building a Winning House Flipping Team: Roles and Responsibilities Explained
