Fix-and-Flip Market Updates: Highlights from John Burns' Q1 2025 Survey

Is the fix-and-flip market slowing down, or are new opportunities emerging? This is a constant question for real estate investors (REIs). The Q1 2025 Fix-and-Flip Market Survey from John Burns Research & Consulting (JBREC), conducted in partnership with Kiavi, offers valuable insights into the evolving real estate market.

We dove into the newly released Q1’25 data, highlighting key findings, including market challenges, regional performance, pricing trends, and investor sentiment. Whether you're a seasoned flipper or just starting, understanding the latest trends could help you make smarter, more profitable decisions. Are you ready to see what we found?

Understanding Current Fix-and-Flip Challenges

According to the JBREC Q1’25 survey, the fix-and-flip market is facing a unique set of challenges in 2025, primarily shaped by shifting market conditions. 

Here are key highlights from the survey:

Market Performance

Despite external pressures, 31% of flippers reported good sales compared to seasonal norms. However, the Fix-and-Flip Market Index (FFMI) currently holds at 57, reflecting stabilizing conditions. (The FFMI indicates market expansion at values above 50 and contraction below 50.)

Inventory and Competition

Low inventory levels and heightened competition from new homes have made sourcing profitable deals tougher, particularly in regions like Texas, Florida, and the Southwest. For example, only 14% of flippers in Texas and 19% in Florida reported good sales performance.

While these challenges may seem daunting, opportunities still exist for strategic investors. Consider alternative investment opportunities such as entering the build-to-rent market or diversifying your portfolio into more stable, supply-constrained regions.

Regional Market Performance Insights

We all know location matters, and the JBREC Q1 2025 survey proves this. Here’s a snapshot of how different regions are performing according to the survey:

Strong Performing Regions

• Northeast and Midwest: Real estate investors in the Northeast reported the highest sales success, with 58% seeing good sales due to supply-constrained conditions.
• Southern California: Similarly, 33% of REIs in Southern California reported strong seasonal sales, outperforming the national average of 31%.

Cooling Regions

• Sunbelt States (Texas and Florida): Elevated inventories and fierce builder competition dampened performance, with only 14% of Texas flippers and 19% in Florida reporting good seasonal sales, according to JBREC.
• Regional Pricing Trends: According to the JBREC survey, homes in regions like the Sunbelt frequently sold below the estimated after-repair value (ARV). Meanwhile, Northeast flippers often exceeded ARV expectations.

Real estate investors should consider using these new insights to focus on areas where limited supply boosts competitiveness, and potentially leave higher-inventory regions as secondary options.

Pricing Trends in 2025

Pricing dynamics in the fix-and-flip market are continuing to shift in fascinating ways, according to the Q1’25 Survey:

High-Value Properties: About 33% of flipped homes sold for over $500K in the past 12 months, with a noteworthy 6% rise in homes priced between $500K and $1M compared to early 2024. For a real estate investor, this could indicate a strong demand in the higher-end market, presenting an opportunity to focus on flipping properties in this price range for potentially greater returns.

Geographic Pricing Variance:

• California currently leads with average flipped home prices exceeding $820K.
• The Midwest currently offers potentially more affordable options, with an average flip price around $290K.

Pricing homes for flips can be tricky, especially with constantly fluctuating market trends. Tools like the Kiavi ARV Calculator can help estimate ROI and guide profitable decisions.

Investor Sentiment and Future Market Outlook

According to the Q1’25 Fix-and-Flip survey, despite ongoing challenges, the sentiment among fix-and-flip investors remains cautiously optimistic:

Future Sales Outlook:

The flipped home sales index is at 58, reflecting broad optimism for the next six months. Real estate investors could expect stable demand in resilient markets like the Northeast.

Shifting Competition:

While heightened competition can signal market health, 17% of flippers now see less competition than is typical, which could create opportunities to find deals. According to the Q1’25 survey results, competition for deals is highest in Northern California (54%) and lowest in Texas (26%).

Long-Term Investment Plans:

Encouragingly, 66% of surveyed investors plan to purchase more properties for flipping in 2025, highlighting confidence in the market's resilience.

Even with potential challenges, these insights suggest significant room for growth, especially for investors willing to adapt flexibly.

Strategies to Adapt in this Market

Thriving in the 2025 fix-and-flip market could mean staying agile and strategic. Here’s how you could consider adapting to these challenges:

Managing Costs

• Renovation Budgets: According to the survey results, renovation costs averaged $72K in Q1 2025, adding pressure on profit margins. Focusing on properties with minimal repair needs could help control costs and increase ROI.
• Creative Savings: Real estate investors could consider cost-tailoring strategies, such as bulk material sourcing and streamlining labor partnerships, to reduce expenses and potentially maximize profitability.

Finding Deals

• Inventory Opportunities: Rising inventory in some regions means less competition and better deals. Use the JBREC Q1’25 survey's market data results to potentially identify properties with strong potential.
• Sourcing Techniques: Consider combining on-market tools, like multiple listing services (MLS), with off-market strategies like networking with wholesalers and attending local real estate meetups.

Shifting to Rentals

• Fip-to-Rent or Build-to-Rent Options: Consider pivoting to DSCR rentals for potential growth. With strong demand in areas like Florida and the Southeast, converting properties to DSCR rentals could be a smart strategy for maximizing returns.

The New Generation of Investors

This quarter, JBREC conducted new research into the trends shaping the real estate industry—and the results were fascinating. The survey revealed a diverse age distribution among real estate investors (REIs). While 30% of investors fall between 46 and 55 years old, and 28% are between 36 and 46, a notable 11% are younger, between 16 and 35, showcasing a growing presence of newer, younger investors. 

These younger REIs could help drive innovation with affordability-focused strategies, creative financing methods, and forward-thinking concepts like tiny homes and accessory dwelling units (ADUs). 

Meanwhile, 31% of investors might be 56 years or older, potentially representing a wealth of experience within the industry. This mix of fresh ideas and seasoned expertise could offer an exciting opportunity for collaboration, mentorship, and overall industry growth.

Staying Competitive With Data-Driven Decisions

To potentially succeed in the fix-and-flip market, staying informed could be one of your best assets. 

Here’s how data might work in your favor:

• Regularly review regional trends, such as the John Burns blog and quarterly surveys, to spot high-potential investment areas.
• Leverage tools like Kiavi’s ARV calculator for accurate pricing and profit projections.
• Attend localized events like the recent IMN SFR East Conference—or read about key takeaways if you can’t make it—to gain valuable insights into your markets and connect with other industry experts.

Utilizing data is key to making the best decisions in the fix-and-flip market. By staying informed and leveraging insights, you could potentially identify better opportunities, minimize risks, and maximize your chances of success. Let data guide your next move and help you stay ahead in your market.

Positioning Yourself for Success in 2025 

Fix-and-flip might have its challenges in 2025, but there are still plenty of opportunities for real estate investors who stay prepared and informed. With economic changes, regional trends, and shifting investor demographics, it’s all about staying flexible and thinking strategically.

By monitoring costs, tweaking your investment strategies, and using the right tools, you could potentially stay ahead and even thrive in this market. Understanding the market is the first step toward success!

Stay ahead with JBREC’s quarterly surveys, delivering key insights to keep you informed. Remember, knowledge is your competitive edge.