House Flipping is Popular Again

by admin on October 25, 2012

According to a recent article from the Washington Post, flipping homes is booming business again.  The number of flips rose 25 percent during the first half of 2012 from the same period a year earlier, according to research firm RealtyTrac, and the gross profit on each property averaged $29,342.

RealtyTrac Vice President Daren Blomquist said the resurgence in flipping offers another indication that, in many parts of the country, housing prices have finally stopped falling. “There are flippers in any market, but a market where home prices are appreciating is much more forgiving for flippers than a market where prices are depreciating,” Blomquist said. “We have turned that corner in a lot of places in the last six months, so that’s going to attract flippers.”

“The flippers we saw going crazy at the height of the real estate bubble were very speculative in nature and were solely relying on home price appreciation to continue at a torrid pace,” said Blomquist of RealtyTrac. “The flippers we’re seeing these days have to be much more cautious. . . . They’re not just relying on time to increase the value of the property; they are improving it.”

With home prices on the rise, record low interest rates and shrinking housing inventory,  more investors are willing to take a chance and incur risk with the promise of profit ahead.

 

 

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