The housing market is starting to show signs of life again, attracting a new generation of “house flippers.”
Areas of the country that were greatly affected by the housing crash are beginning to regain strength. According to the research firm RealtyTrac, the number of flips nationwide rose 25 percent during the first half of 2012, and the average gross profit was $29,342.
Florida is doing especially well in the recovery process, coming in second to California. Miami, in particular, is ranked the 4th most popular city in the country for flipping houses. There are numerous investors and home buyers competing for a small number of listings, which has led to bidding wars and exuberant offers. As a result, RealtyTrac has found that the average gross profit for flipping a home in Miami is $38,943, well above the national average.
Investors are able to get great deals on foreclosures and short sales, and buyers are eager to take advantage of today’s record-low interest rates. Loan applications have tripled in the past few months and the market shows few signs of slowing, according to Justin Konz, an executive at Restoration Capital, a “hard-money” lender that provides fast, short-term financing for flippers.
The old generation of house flippers relied solely on time to appreciate the value of their houses, but the new generation is buying distressed realty, fixing it up, and then selling it to make a profit. Not only are the flippers benefiting from this, but they are also providing an important function towards the recovery of the housing market.