Despite Higher Prices, Home Flippers Find Opportunities

May 21, 2018

Increasing home prices aren’t deterring investors from flip projects. The ratio of flipped properties to sales rose to 6.2 percent in the first quarter of this year, which matches a high set in the first quarter of 2013, CoreLogic reports. Its study defined a flipped property as a home that was bought and sold within a 12-month period.

With surging prices, home flippers are finding fewer options among distressed properties, which dropped from a 30 percent share of the market in January 2013 to 4.4 percent at the end of 2017. Home prices, which have seen six straight years of appreciation, also have surpassed their peak values in many markets prior to the housing crash, researchers note. 

“Consequently, the acquisition cost in nominal dollars for investors has increased drastically,” CoreLogic notes at its Insights Blog. “High acquisition cost, tight inventory, and rising flipping activities together point to possible speculation: Investors are betting on continuous home price growth.” 

Source: “House Flipping Reaches a Post-Crash High Across the Nation,” CoreLogic Insights Blog (May 16, 2018)