House flipping is having its best days after 2006 real estate crash. The proof is popularity of real estate shows and the statistic that shows the number of houses flipped.
According to a report, the number of single-family homes and condos flipped in 2016 is 193,000, with an increase of 3.1% as compared to 2015. However, this number is still 43% lesser than that of 2006, the year in which housing bubble was burst.
Daren Blomquist, senior vice president at Attom, says, “We’re in the midst of another home flipping boom. The popularity of reality shows featuring home flippers certainly plays into this rise. It’s a very visible potential way of making money. The way it’s portrayed on some of these shows, it’s very easy to do.”
A record median of $62,624 was made by investors in buying, rehabbing and selling the properties in 2016. The return on investment was recoded as 49.2%.
Markets which were popular among home flippers
Memphis, TN has emerged as the hottest market for home flipping in 2016. James Alston, who helps Memphis Cashflow in finding discounted properties, says, “Last year was a record year for us. You can get distressed properties pretty cheaply.” It’s worth mentioning that Memphis Cashflow is company that deals in purchasing discounted properties, rehabbing those properties and selling them to the investors. This company also deals with rental management.
However, things are getting a bit complicated for the prospective buyers as more investors are heading towards Memphis, TN.
After Memphis, other hottest markets include Clarksville, TN; Visalia, CA; Tampa, FL; and Deltona, FL. These are the most affordable markets in the country.
It is the affordability that made Reading, PA one of the big home flipping markets in the country. This city has been infamous due to high crime rate in the past. Now it’s a home flipping market.
Allen Gehringer of Century 21 Gold says, “If you do a really nice job of rehabbing them, you can usually do well on the reselling.” Allen Gehringer has been in Reading, PA for decades flipping houses.
It is still unknown what the short-term future of home flipping is
Due to the fact that economy has recovered to a great extent, the rate of distressed property purchase is getting lower. According to Blomquist, “Would-be flippers can’t just go to the foreclosure auction. They’re going into the neighborhoods and looking for the homes that most buyers would pass over … smaller homes built in the ’60s or ’70s that don’t have the modern aesthetics.”
However, another fact is that the flippers, in general, would go after the properties that people in their senses would most probably reject to live in. This is the reason they are not going to be affected by the shortage of move-in ready homes in the market.