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Don't start pitching more house-flipping reality shows to mediocre networks just yet: There's money in house flipping, but not a lot of opportunity to do it.

According to real estate data firm RealtyTrac, just 3.7% percent of all U.S. single family home sales in the first quarter were flips -- in which a home is bought and  sold again within six months. That's down from 4.1% percent in the fourth quarter of last year and down from 6.5% in last year's entire first quarter.

The good news is that the average sales price of single-family homes flipped in the first quarter was $55,574 higher than the average original purchase price. That's an average 30% return on investment. Not bad, right? Well, that's the bad news. The average ROI a year ago was 28%, so that return's a bit flat. It gets even more dicey when you consider that the average ROI for the fourth quarter of 2013 was less than 10%. It's better than the 10% loss house flippers were taking back in 2011, but it's still volatile.

It's also still highly dependent on where you're plying your trade. Foreclosure-plagued markets are still seeing the highest percentage of homes flipped, with New York City (10.2%), Jacksonville, Fla., (10%), San Diego (7.1%), Las Vegas (6.7%) and Miami (5.9%) leading the way. As foreclosure numbers fall, though, many property-rich markets are seeing fewer homes flipped. Some of the biggest drops were in New York ( where flips are down 37% from last year), Phoenix, Ariz. (down 39%), Riverside-San Bernardino in Southern California (down 22%), Atlanta (down 57%), Chicago (down 29%) and Las Vegas (down 9%).

There are more than a few factors at play here. First off, foreclosure activity and bank repossession in the first quarter fell to their lowest levels since spring and summer of 2007. The number of mortgaged properties that were seriously underwater -- when what's owed on a mortgage is 25% or more higher than the value of a home -- fell to 9.1 million in the first quarter from 12.8 million in the fourth quarter of 2012. That's still 17% of all mortgaged homes, but that's a percentage heading in the right direction. Sales of distressed properties are down from 18.5% of all sales early last year to 16% in the first quarter of this year, while single-family home prices have risen 10% during that time.

More important, however, is the fact that 82% of flipped homes are being sold to owner-occupants and being taken out of circulation, with 43% of those buyers closing all-cash sales. With housing inventory up, but still below the ideal six-month benchmark, flippers have to dig deeper not only to buy homes, but to rehab them for maximum returns.

So where do you go to get the most for your money? Well, the highest gross return on investment year-over-year came from Pittsburgh (up 89%), Philadelphia (56%), Memphis (51%), Detroit (48%) and Seattle (48%, which helped increase flipping activity 19% from last year). Just keep in mind that the median investment for renovations on a flipped house over the past three years was nearly $5,000 -- on top of what you'll already be paying for the property.

Buyers can still turn a tidy profit flipping a house, but the houses available for such an investment and the markets open to it are drying up faster than the ink on new closing documents.

This article was republished with permission from TheStreet.