A recent report released by ATTOM, a real estate data firm, shows that profits from speculation have taken a hit as the property market has slowed and investors have pulled out of the market, but speculation is once again delivering higher returns on investment.

According to ATTOM, in the second quarter of this year, investors typically made about $66,500 in gross profits on property speculation. That figure represents the difference between what they paid for the property and the price it sold for, and it doesn't subtract the costs they spent remodelling the home. Repairs and updates account for 20 to 33 per cent of the sale price of a home.

Profits rose for the second consecutive quarter. Profits were up 18 per cent compared to the first quarter of the year, but still down 35 per cent compared to the same period last year. The return on investment was about 27.5 per cent, well below the high of 61 per cent reached two years ago.

The national median sale price for flipped homes was $308,500, according to ATTOM.

The fortunes of investors who flip homes for quick profits are showing more signs of a turnaround," ATTOM CEO Rob Barber said in a statement. It's too early to declare an end to the profit slump, as much will depend on whether the market surge in the second quarter continues or if it retreats again as it did last year."

According to ATTOM, about 8 per cent of all single-family home and condo sales from April to June - totalling about 84,350 units - were flips. That means about one in every 13 home sales was a flip. That's down from 9.9 percent in the first quarter of this year and 8.9 percent a year ago.

To reach its conclusion, ATTOM looked at sales deed data for single-family homes and condominiums sold at arm's length to identify homes that were sold twice in a 12-month period. This suggests that homes may have been speculated on.

At least part of the economic recovery is due to home prices rising instead of falling. The risk for investors is that they'll buy a property to renovate, they'll spend a lot of money renovating it, and then the market will turn, house prices will fall, and it will be too late for them to put the home back on the market.

The latest return on investment may not be enough to cover the holding costs of the average deal, says Barber.

Which cities have the highest (and lowest) home flip rates?

The South has the highest home flip rate because homes tend to be more affordable there.

The Macon, Georgia metro area has the highest rate of home flipping, accounting for 16.8 percent of all home sales. This was followed by Columbus, GA (15.3%), Spartanburg, SC (13.5%), Atlanta, GA (13.5%) and Akron, OH (12.5%). (Only cities with 200,000 or more residents and at least 50 flip transactions during the second quarter of the year were included in the statistics.)

The Midwest and Mid-Atlantic regions have the most profitable flippers. Akron had the highest return on investment at 116.7 percent, followed by Pittsburgh at 112.9 percent; Scranton, Pennsylvania, at 93.7 percent; Hagerstown, Maryland, at 86.6 percent; and Trenton, New Jersey, at 85 percent.

Flips are least common in some of the nation's most expensive housing markets.

The Seattle metropolitan area had the lowest flip rate at 3.7 percent. In addition, Santa Rosa, California, had a 4 per cent flip rate, San Jose, Silicon Valley, 4.2 per cent, San Francisco, 4.3 per cent, and Hilo, Hawaii, 4.3 per cent.