Flipping Houses...This seems familiar
By: Anthony Ramamsumiran •
The one rule of thumb for flipping houses generally follows this rather basic principal; Properties bought with the intentions of flipping generally enters the sales market when house prices begin to peak.
Recent figures from a national angle does show house sales remaining stable, with Las Vegas and Miami being exempt. Both Miami and Las Vegas were the hottest markets for the last housing boom, when the markets crashed property lost more than half their value.
The rule general definition for house flipping is houses are purchased and sold within the same calendar year. In early to mid 2000’s (before the crash) flipping a house was easier than ever for many reasons. Prices were heavily appreciating, supply of new builds was high and we were going through the period where a baby could get a mortgage with no down payment. These days, things have changed and various restrictions have been created and lenders are very stringent on who can borrow. But the flipping culture still exists in certain parts of the U.S.
Data from Trulia shows that during the start of the last peak, flipping on a national scale made up 8.6 percent of all home sales. Recent figures suggest that they are down to 5 percent and remaining at a constant. Las Vegas is playing in its own league with figures making up 10.4 percent of sales making sin city the highest in the U.S and sales figures remain to rise.
Florida is also experiencing good sales from the recent flipping frenzy and activity in Miami has jumped from 4.7 percent of home sales to 6.4 percent. Both Florida and Las Vegas was hit HARD with the last housing crash and to an extent still recovering with distress sales still higher than average. Detroit is currently going in the opposite direction sporting the lowest level of housing flips nationally.
Large scale investors bought foreclosure properties shoving small scale investors out the way. Houses were losing value and lenders pretty much locked up the housing market. Over the past four years, property prices began to rise again, flipping started to show profits but not what previous levels were.
Recent market trends and a shorter supply of used/foreclosed properties for sale now combined with a housing market still appreciating in value. Finding the ideal house to buy and flip is possible, but you might have to look harder for that diamond in the rough.
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