Observers are happy with some of the positive indicators they are seeing in the housing market on a national scale, but the greater Tampa Bay area — including Pasco and Hillsborough counties — continues to struggle to keep up.
House flipping — homes that are bought and resold within 12 months — dropped to 4 percent of all national single-family home sales in the third quarter, according to a new report from RealtyTrac, but actually rose in the Tampa area. That has kept the Tampa metropolitan market on the list of the top five most-flipped markets in the nation with 789 flips behind Miami (1,190 flips), Los Angeles (1,170), Phoenix (1,147) and New York (1,070).
Flipping was down in all the top five markets except Tampa, helping to bring the level of home-flipping to its “historic norm,” according to RealtyTrac vice president Daren Blomquist. And a lot of that is because home appreciation rates have slowed a bit in those markets to more normal levels.
“Meanwhile, the record-high average profits per flip in the quarter demonstrate that flippers are still filling an important niche in an aging housing market with historically low levels of new homes being built,” Blomquist said, in a release. “The most successful flippers are buying older, outdated homes in established neighborhoods, and rehabbing them extensively to appeal to modern tastes.”
Flipping is not always bad. From the investment side, those who bought and flipped were seeing profits of just under $76,000 per flip in the third quarter, a return of 36 percent on their initial investment — not including rehab costs and other expenses — Blomquist said. That is up from 35 percent in the second quarter, but down from 37 percent a year ago.
“Those discounted distressed properties have become harder to find,” he said, “but a recent jump in scheduled foreclosure auctions could provide more fodder for flippers in the next three to six months.”
Most of the flipping activity at the national level have been among homes priced between $100,000 and $400,000, while just 20 percent involve homes less than $100,000. However, RealtyTrac analysts say the best returns in flipping come on homes above $1 million, which has an average gross return of 45 percent, but make up less than 4 percent of all flips.
