HousingWireHousingWire
New survey data from John Burns Research & Consulting and Kiavi reveals declining optimism among home flippers, mainly due to concerns about tariffs and how broader economic uncertainty affects housing demand.
Nearly all responses to the survey, conducted from April 1–28, came after the Trump administration’s tariff announcement in early April.
Nationwide, flippers now expect price growth of 1.8% for flipped homes over the next six months, down from last year’s expectation of 2.9% growth.
John Burns and Kiavi said that flippers in every region except the Northeast are predicting lower home-price appreciation over the next six months compared to the first quarter of 2024. Flippers expect prices to fall in three regions — Florida, Southern California and Northern California.
In regard to sales volume, only 31% of flippers expect good sales compared to normal seasonal patterns over the next six months. This marks the most pessimism flippers have expressed about sales since late 2022, when mortgage rates topped 7% in the first time in more than 20 years.
Economic uncertainty and regional housing supply conditions are major factors impacting sale estimates. Flippers are least optimistic in regions that have significant new-home inventory and existing homes for sale — like Florida and Texas, where a respective 16% and 18% of flippers expect good sales relative to seasonal norms in the next six months.
But flippers are much more confident in regions with limited housing supply as 57% in the Northeast and 40% in the Midwest expect good sales in the next six months.
To get an idea of how flippers would react if construction costs rose as a result of tariff activity, the survey asked them to imagine if costs rose by 10% as a simple benchmark. It noted that the actual impact of tariffs will likely vary depending on the type of renovation needed.
About one-third of flippers (32%) said they would focus on properties that need less extensive or less expensive renovations. Another 7% said they would switch to cheaper alternative materials and 6% said they would simply flip fewer homes.
Combined, 45% of flippers said they would prioritize spending less on renovations if material prices suddenly increased.
Regionally, sellers have the most pricing power in the Northeast and Midwest. These are relatively low-supply regions, meaning that flippers are more likely to pass on cost increases to buyers. In Florida’s higher housing inventory environment, flippers lack pricing power and would more likely absorb costs by reducing their profit margins.
Flippers are also more likely to reduce their margins in California, where a 10% increase in material costs has relatively less impact on their overall margins.
