Price Hikes Help High-End Flippers | Waccabuc Real Estate

Recovering prices helped short-term flippers earn an average gross profit of $54,927 on single family home flips in the third quarter, up 12 percent from a year ago.

RealtyTractoday reported that in the third quarter there were 32,993 single family home flips – where a home is purchased and subsequently sold again within six months – in the third quarter of 2013, down 35 percent from the second quarter and down 13 percent from the third quarter of 2012.

The higher gross profit was driven in part by an increase in high-end flips on homes that were sold by flippers for $750,000 or more. A total of 968 high-end homes nationwide were flipped in the third quarter, down 13 percent from the previous quarter but up 34 percent from a year ago. More than three-fourths of all high-end flips were in five markets: the New York metro area and four coastal California markets – Los Angeles, San Francisco, San Jose and San Diego.  Flips on homes priced between $1 million and $2 million increased 42 percent year over year, while flips on homes priced between $2 million and $5 million increased 350 percent year over year.

“Increasing home prices over the past 18 months combined with decreasing foreclosures have created a market less favorable to the high quantity of middle- to low-end bread-and-butter flips that we saw late last year and early this year,” said Daren Blomquist, vice president at RealtyTrac. “But the sharp rise in high-end flipping indicates there is still good money to be made for flippers willing and able to take on the additional risk of buying and rehabbing more expensive homes. With that higher risk also comes the potential for higher reward. The average gross profit on each high-end flip equals more than four times the average gross profit on each flipped home in the lower price ranges.

 

 

 

http://www.realestateeconomywatch.com/2013/10/price-hikes-help-high-end-flippers/