Are distressed home sales creating a new breed of house flippers?

las vegas aerial at night

After the housing bust, Las Vegas saw a dramatic increase in investors swooping into the market and buying homes cheap and in bulk, to turn into rentals. This caused an increase in demand, which in turn increased property values at one of the fastest rates nationally. The ending result was a massive sigh of relief from homeowners rescued from underwater home values, and eliminating their need to short sell their property.

The fast flipping in the valley, a hallmark of the Las Vegas housing bubble, began to rise again last year. RealtyTrace reports that flips comprised 7.2 percent of single-family home sales in the Las Vegas valley. This number has risen 0.9 percent from 2012. The result was an average gross profit per flip of $44.501, compared to the feeble $20,872 per flip in 2012.

Investment buying and house flipping are well thanked for bringing the Las Vegas housing market back and helping the strengthen the overall housing market. However, with a new error, new rules and a new market comes a new type of house flipper.

Who is a House Flipper?

RealtyTrace defines flipping a house as buying and selling a home within a six-month period of time. Prior to the recession, the average house flipper was blamed for causing the bubble that popped in 2008, and the damaged home prices due to the resulting recession, Back then a house flipper was an investor, and likely had little or no real estate expertise. They easily obtained a bank loan to buy a property and sell it for a profit just a few months later an eagerly awaiting and rising market. The market drove the prices and sales, and this is what resulted in that dreaded housing bubble.

The house flipper in 2014 a very different profile. They are experienced real estate investors, backed with cash, and not having to secure a bank loan to acquire a home. They are seeking out the distressed homes trickling back onto the market as foreclosures and bank-owned properties.

Last December over 16 percent of home sales involved distressed properties and were sold at an average discount of nearly 40 percent compared to non-distressed housing sales. In 2013, 41 percent of homes sold last year were distressed properties, by far the highest in the country. The house flipper in 2014 is actually helping to transform properties that traditional buyers would never consider touching into a home that buyers jump at owning.

Find & Follow Windermere Anthem Hills

Like us on Facebook | Follow us on Twitter | Review us on Google+

Speak Your Mind

*

4 × one =

Copyright © 2014 by Windermere Services Company. Develop By Hunter Marketing Group