With seemingly endless news coverage of this unprecedented, white-hot housing market and oodles of pandemic-induced free time to stream HGTV or Discovery+, it may seem like a no-brainer to get in on the home-flipping game these days.

Given sky-high demand and rapidly rising prices, flippers should be having their best year ever. Right? After all, median list prices have risen 13.7% since the beginning of this year, according to Realtor.com® data. And they’re continuing to rise.

But not so fast. These high home prices, combined with a record-low number of homes for sale and rising construction and appliances costs, are burrowing into flippers’ bottom lines. For flippers, it is truly the best of times—and the worst.

While the number of home flips has reached record levels, profits are shrinking, according to a Realtor.com analysis of deeds records. That’s why the data team wanted to take a look at where flippers can still make a good return on their investment—and where profits have dropped so much that it may not be worth their while.