Tags: US | Return | House | Flipper

Now Playing in the US: Return of the House Flippers

Tuesday, 02 Jul 2013 08:19 PM

By John Morgan

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
House flipping is apparently making a comeback in the United States, which may or may not be a sign of a healthy housing market recovery.

The practice, whereby a property is bought, renovated and then sold quickly to make a profit, was a familiar sight during the residential real estate go-go boom of the early 2000s until the 2008 housing crash.

Now foreign buyers and an influx of entrepreneurs from other industries are resurrecting it, according to The Wall Street Journal and other observers.

Video: Economist Predicts 'Unthinkable' for 2013 

Wall Street Pit declared that house flipping is a symptom that a housing bubble may be forming again.

“It looks like people haven’t learned much in the last seven years,” Wall Street Pit concluded. It cited one report that flipping in some parts of Southern California have jumped as much as 45 percent in the past year, even while it noted frothy price appreciations in some markets and a 2.1 percent increase in U.S. home sales in May alone.

“Wondering where all that new Fed liquidity is going?” Wall Street Pit asked. “Wonder no longer!”

The Journal interviewed two successful flippers of high-end homes. One of them, a private-equity banker in Los Angeles, Bruce Bartlett, reported he bought a home for $825,000, and expected it to sell after renovations for $1.4 million and a 37 percent profit.

“These aren’t paint-and-lipstick jobs,” Bartlett told the Journal. “Basically, you have to re-envision the whole house.”

Another flipper interviewed bought a house in the Columbia Heights neighborhood of Washington, D.C., for $461,500, made renovations, and got it under sales contract for $805,000 after only three days on the market, the Journal reported.

The CBS Evening News weighed in earlier in June on the phenomenon. It reported on a Los Angeles house flipper who had 18 homes he was fixing up simultaneously in order to flip them.

CBS interviewed one realtor, Laura Key, who described the current Los Angles housing market as “a mess.”

"There's always multiple offers. Then it's sold within 24 hours. Then, less than 30 days, back on the market," she said of the houses being sold there.

The houses Key was referring were re-selling for at least $50,000 to $75,000 more than what the flippers purchased them for, CBS reported.

Video: Economist Predicts 'Unthinkable' for 2013

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved