US Sees Residential Real Estate Flips Decline

In recent data released by RealtyTrac, the number of residential real estate flips has gone down, both quarterly and annually. Flipping property is when an investor purchases a home to make improvements (or not) and sells it within the next six-to-twelve months for profit.

The data shows that third-quarter figures decreased 35 percent from the previous quarter and 13 percent from the previous year. Experts are attributing rising home values to the fall in flip sales, although some individual markets still showed gains despite national figures. Los Angeles, New York, Las Vegas, and Chicago all showed increases in annual flipping sales figures.

However, the sales of these high-end residential real estate flips — those sold over $750,000 — showed increases nationally. With 34 percent more high-end flip sales than the third quarter of 2012, and a few markets showing greater numbers than others. Los Angeles, New York, San Francisco, San Jose, and San Diego accounted for more than 75 percent of high-end flip sales.

Home values in many markets are coming up to the point that investors no longer see the value in spending as much as homes cost today. On the other side of this coin are those who still have the funds for flipping and can increase supply for those buyers who can't afford new construction. The flip market is still alive and well, in fact, profits for flips have increased by 12 percent on average, despite decreased sales in the third quarter.

How do you feel about the market for residential real estate flips in today's climate? Are you seeing a decrease in flipped houses in your area? We want to know.

Photo Courtesy of Thien Gretchen’s Flickr