When it comes to the U.S. housing market, there are two clusters: an undisputed bubble among the luxury, bi-coastal or “flippable” markets, which serve a tiny portion of the population but a major portion of foreigners seeking to park illegal money in U.S. real estate, and a rapidly sinking market serving everyone else.

For the purpose of this post we are more interested in the first, “bubbly” segment, and specifically that unforgettable remnant of the old housing bubble which is alive and well right now: flipping.

According to RealtyTrac, in the third quarter there were a grand total of 43,197 single family homes and condos “flips” – units sold as part of an arms-length sale for the second time within a 12-month period – or 5.0% of all single family home and condo sales during the quarter. This was an increase of 18% from a 4.3% share in the third quarter of 2014.

As RealtyTrac further reports, the average gross flipping profit, the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping experts estimate typically run between 20 percent and 33 percent of the property’s after repair value), was $62,122 for completed home flips in the third quarter. That was down slightly from an average gross flipping profit of $62,521 in the second quarter but up slightly from an average gross flipping profit of $61,781 in the third quarter of 2014.

The average gross return on investment (ROI), the average gross profit as a percentage of the average original purchase price, was 33.8 percent for completed home flips in the third quarter, down from 34.4 percent in the previous quarter but up from 32.7 percent in the third quarter of 2014.

But we don’t care about the entire market. We only care about those markets where the Return On Flip (ROF) is highest.

Based on RealtyTrac data, among 101 markets with at least 75 single family and condo flips in the third quarter, those with the highest average gross flipping ROI were Pittsburgh (78.4 percent), New Orleans (73.1 percent), York, Pennsylvania (64.5 percent), Punta Gorda, Florida (61.3 percent), and Clarksville, Tennessee (59.6 percent).

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