The U.S. fix-and-flip market has shifted dramatically over the past decade. While deeply discounted homes have become harder to find, rising home values continue to make flipping a profitable business model for experienced investors.
Recent historical data from ATTOM shows that distressed property sales hit long-term lows while seller profits continued to climb—patterns that remain highly relevant as we move through 2026. Understanding these trends helps real estate investors navigate today’s tight inventory, elevated demand, and shifting regional investment opportunities.
In this updated guide, we break down what the data reveals, which markets historically offered the best buying opportunities, and how investors can leverage today’s rising home prices for profitable fix-and-flip returns.
Distressed Property Sales Hit Record Lows
ATTOM’s reported 2016 statistics—still reflective of long-term structural market trends—revealed that distressed sales reached their lowest level since before the Great Recession. While today’s market differs, the directional pattern is useful for understanding today’s limited distressed inventory.
What Counts as a Distressed Sale?
- Bank-owned (REO) properties
- Short sales (sale price does not cover the mortgage)
- Foreclosure auctions sold to third parties
In 2016, distressed properties made up 16.2% of all single-family and condo sales—down from 18.8% the year before and the lowest since 2007.
Breakdown of Distressed Sale Categories
- Bank-owned (REO): Dropped to 8.0% of sales — the lowest since 2006
- Short sales: Fell to 5.5% — lowest since 2008
- Foreclosure auctions to third parties: Down to 2.8%, lowest since 2007
Even today, in 2026, distressed inventory continues to trend below historical averages, contributing to tighter competition and higher acquisition prices for flippers.
Where Investors Historically Found the Most Distressed Deals
The metro areas with the highest share of distressed sales included:
- Atlantic City, NJ – 43.8%
- Hagerstown–Martinsburg, MD–WV – 33.2%
- Rockford, IL – 29.2%
- Montgomery, AL – 29.2%
- Baltimore, MD – 28.0%
Markets like these—where distressed sales once dominated—often continue to be strong opportunities for finding lower-priced fix-and-flip inventory in the modern market.
Foreclosure Auctions See Increased Competition
One particularly notable data point:
28.5% of foreclosure auctions sold to third-party buyers, the highest level since ATTOM began tracking the metric in 2000.
This suggests—and still holds true today—that:
- Investors are aggressively competing at auctions.
- Higher bids are pushing auction prices upward.
- In some cases, proceeds even exceed outstanding debts, allowing distressed homeowners to walk away with surplus funds.
Top markets by number of foreclosure auction sales included:
- Miami – 4,954
- Philadelphia – 4,043
- Atlanta – 3,657
- NY–NJ Metro – 3,495
- Tampa – 3,163
When measured as a percentage of foreclosure sales, western metros dominated:
- San Jose, CA – 59.1%
- Los Angeles, CA – 52.2%
- Reno, NV – 52.1%
- Ventura County, CA – 50.3%
- Stockton, CA – 50.2%
Rising Home Prices Continue to Boost Seller Profits
Even as distressed inventory shrinks, increasing home values continue to create strong profit potential. In 2016, sellers earned an average of $38,206, representing a 21% gain—the highest since 2007.
Although absolute numbers differ today, the structural trend of rising U.S. home prices continues into 2026 due to:
- Limited housing supply
- High buyer demand
- Growing investor activity
- Inflation-adjusted asset appreciation
West Coast markets historically led the nation in seller gains:
- San Francisco – 69%
- San Jose – 69%
- Santa Rosa – 52%
- Los Angeles – 49%
- Seattle – 48%
For updated home price indexes and appreciation data, see the FHFA.
Median Home Prices Continue Long-Term Upward Trend
The median U.S. home price rose 6.8% in 2016, almost reaching pre-recession highs.
Today, in 2026, median prices continue climbing year over year in most regions, driven by inventory constraints and high demand.
Top markets with double-digit home price appreciation historically included:
- Tampa–St. Petersburg – 14.0%
- Denver – 11.3%
- Portland – 12.1%
- Orlando – 10.1%
- Jacksonville – 12.9%
High-value counties included:
- Manhattan – $1.4M
- San Francisco – $1.175M
- San Mateo – $1.075M
- Marin County – $950K
- Santa Clara County – $860K
Institutional Buyers & All-Cash Purchases
Two additional metrics relevant to flippers:
Institutional Buyers
- Institutional investors purchased 2.8% of homes.
- Significantly below the 2012 peak of 7.8%.
- Top metros:
- Columbus, GA–AL – 11.6%
- Birmingham, AL – 10%
- Memphis – 9.9%
- Montgomery, AL – 9.6%
- Binghamton, NY – 9.1%
All-Cash Buyers
- 28.3% of all homes were bought with cash—another long-term low.
- Top markets for cash sales included:
- Binghamton – 69.4%
- Buffalo – 63.6%
- Syracuse – 58.4%
- Macon – 52.5%
- Montgomery – 52.5%
What This Means for Fix-and-Flip Investors in 2026
Even with shrinking distressed inventory, the market continues to offer opportunities:
- Rising home values increase potential flip profits
- Auction competition is high—but so are returns
- Institutional activity remains manageable, leaving space for local investors
- Cash buyers remain active, but financing tools can help investors stay competitive
For experienced investors, disciplined property selection, tight renovation strategy, and strong financing remain key to success.
Ready to Leverage Market Trends for Your Next Flip?
Center Street Lending provides fast, flexible fix-and-flip financing to help investors move quickly in today’s market. Whether you’re purchasing off-market, at auction, or from the MLS, we can help you maximize your ROI.
Contact us today to explore loan options for your next investment property.
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