More houses are being flipped over the first half of 2013 than in recent history. The new property data from RealtyTrac showed the number of homes across the U.S. that have been bought, renovated, and re-sold in a short amount of time.
According to the data, more than 136,000 single-family homes were flipped in the first two quarters of this year, and they are selling so well that the numbers are helping the re-building housing market gain some of its former strength. Sales are 19 percent higher than 2012, and 74 percent higher than 2011, when the U.S. market was attempting to recover from the economic downturn.
It appears that housing is now back, as the the statistics across the board are trending up. RealtyTrac stated in its July 19 press release that real estate investors made an average gross profit greater than $18,000, which is a 9 percent return on the initial purchase price. The improvement is staggering - real estate records showed a 246 percent increase from the 2012 average gross return and the 2011 average loss.
"While flipping continues to be profitable in most markets, particularly those where the home price recovery is still nascent and a recent rebound in foreclosure activity allows investors to find distressed inventory at a discount, home flipping is tapering off in markets where fewer of those distressed bargains are available," said Daren Blomquist, vice president of RealtyTrac. "Out of the 100 markets we analyzed for the report, 32 had declining flipping numbers, including perennial flipping hot spots like Las Vegas, Phoenix, Southern California and Atlanta. Still flipping was on the rise in more than two-thirds of the markets, including New York, Washington, D.C., Chicago and several Florida metros."
Flipping helps the housing market
Some individual investors are making a living off of the quick buy and re-sale, according to Bloomberg. The purchased homes are sometimes in such disrepair that few others want them, and a flipper can re-introduce unused properties back into the market.
"There are a lot of people in this industry who are looking to do nothing, or just buy paint and carpet, and those homes are much more competitive," John Helmick, owner of Gorilla Capital, told the news source. "The homes we're buying, a lot of people won't even touch them. They are not financeable."
Thanks to aggressive flippers like this, more buyers in the U.S. will get the opportunity to own a quality home. The best strategies often involve searching multiple regions for distressed homes, instead of committing to one specific area. As long as prices are good, profits will follow, inspiring more people to try their hands at home flipping.