US Home Flipping Trends in 2024

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Nine in 10 companies to mandate RTO next year link

• About 90% of companies surveyed plan to enforce return-to-office (RTO) mandates in 2025, despite resistance from employees. Over two-thirds have already implemented some form of RTO, with about 30% requiring full-time in-office work.

• Nearly three-quarters of companies track employee office attendance, with one-third having brought employees back as early as 2022. Roughly 6% of companies indicated they will not require any RTO.

• Companies cite improved productivity, stronger culture, and better employee relationships as reasons for RTO, while those avoiding RTO focus on employee satisfaction and reduced costs. 47% of companies also value remote work for accessing a broader talent pool.

The number of homes for sale has tripled since 2022, giving buyers a huge new edge link

• U.S. housing inventory jumped from fewer than 350,000 homes in 2022 to 910,000 in 2024. The number of homes for sale is up 35.8% year-over-year, marking the highest levels since May 2020.

• Homes now spend an average of 53 days on the market, seven days longer than a year ago. Sellers are offering more price cuts, with 19.3% of listings seeing reductions, the highest for August in over five years.

• The South saw the largest inventory surge, up 45.6%, followed by the West at 34.5%. Tampa, San Diego, and Orlando led major metros with inventory spikes of over 75%.

Life sciences challenged by overbuilding link

• Overbuilding in the life sciences sector has led to an increase in vacancy rates, particularly in key hubs like Boston and San Francisco. Many projects started when demand was higher, but the market has now cooled, leaving a surplus of space.

• Rising interest rates and economic uncertainties are deterring new capital investments in life sciences real estate. Investors are more cautious, focusing on stabilizing existing properties rather than launching new developments.

• A shift towards smaller lab spaces and hybrid office models is emerging as companies try to cut costs. This may become a longer-term trend as companies adapt to a slower growth environment.

US foreclosure activity declines both monthly and annually in August 2024 link

• Foreclosure filings across the U.S. fell to 30,227 in August 2024, marking a 5.3% decrease from July and an 11% drop from a year ago. While foreclosure rates are still much lower than during the 2008 crisis, market pressures remain due to economic conditions and rising interest rates.

• Nevada, Florida, and Illinois saw the highest foreclosure rates in August, with Nevada leading at one foreclosure per 2,473 housing units. Florida followed closely with one foreclosure for every 2,605 housing units.

• Major metro areas like Lakeland, FL, and Las Vegas, NV, had the worst foreclosure rates. Among larger cities, Chicago, IL, and Miami, FL, also saw high foreclosure activity, with over 1,000 starts each in August 2024.

Midwest markets report notably tight apartment occupancy link

• Milwaukee had one of the highest apartment occupancy rates in August, at 95.8%, surpassing national norms. Only New York, Newark, and Anaheim performed better, with rates between 95.9% and 96.9%.

• Most Midwest markets had occupancy rates between 94% and 95%, while St. Louis and Indianapolis lagged slightly below the U.S. average of 94.1%. Their rates stood at 93.7% and 93.6%, respectively.

• Detroit was the only Midwest market with occupancy growth over the past year, rising by 50 basis points. This ranked Detroit among the top five U.S. markets for occupancy gains, alongside cities in the West and South.

US Home Flipping Trends in 2024 ↓

• Home flips accounted for 7.5% of all U.S. home sales in Q2 2024, a drop from 8.7% in Q1 and 7.9% a year earlier. This seasonal decrease is typical during spring as other types of home sales increase.

  

• Investors' gross profits from flips rose to $73,500 in Q2 2024, up from $70,000 in the previous quarter but still below the $81,000 peak in 2022. The average return on investment was 30.4%, marking a slight improvement.

• The largest flipping rates were in Warner Robins, GA (20.7%), Macon, GA (15.4%), and Atlanta, GA (13.4%). The smallest rates were seen in Hilo, HI (3.3%), Honolulu, HI (3.5%), and Seattle, WA (4%).

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2024 could be the worst year for home sales since 1995: Fannie Mae link

• Fannie Mae forecasts 2024 to have the lowest home sales since 1995, with a projected 3.85 million homes sold. This marks a sharp decline from the 4.78 million homes sold in 2023.

• High mortgage rates, currently hovering around 7%, are the key factor behind the slump in homebuyer activity. The lack of affordability has sidelined many potential buyers, particularly first-time homeowners.

• Housing inventory is also expected to remain tight as existing homeowners hesitate to sell, further dampening the market. This is a result of many homeowners having locked in lower mortgage rates during previous years.

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Vidit

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