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Despite flipping decline, Pa. still a leading state for ROI

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Home investors focused on flipping discounted properties struggled to find deals in the second quarter.

In the U.S., 4.6 percent of all single-family home sales were flips — where a home is purchased and subsequently sold again within the year.

That was down from 5.9 percent in the first quarter and 6.2 percent from the same quarter a year ago, according to California-based RealtyTrac Inc.

It was not much better in Pennsylvania. The second quarter yielded home flips totaling 3.7 percent, which was off from 4.7 percent in the first quarter and 5.9 percent in the second quarter of 2013.

But the average gross return on investment in the commonwealth was nearly triple the U.S. rate. In Pennsylvania, flipped homes were purchased, on average, for $106,438 and sold for $171,976 — a gross profit of $65,538, or about 62 percent, according to RealtyTrac.

Pennsylvania had one of the highest percentage returns among states where enough pricing data was available to calculate averages. The commonwealth trailed Indiana (288 percent) and the District of Columbia (75 percent).

The average purchase price nationally was $216,983, with a flip of $263,299, which was a 21 percent return.

Markets with the best return on flips in the second quarter included Pittsburgh at 106 percent, New Orleans at 76 percent and Baltimore at 73 percent, according to RealtyTrac.

Fun facts

• 41 percent: The best returns in the second quarter were on homes with a flipped sale price between $750,000 and $1 million. The average return was 41 percent. Homes in the $50,000 to $100,000 range had the second-best return at 37 percent, followed by homes above $1 million at 35 percent.

• 21 percent: High-end homes — those priced above $750,000 — represented 4.1 percent of all homes flipped in the second quarter, up 21 percent from a year ago.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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