Flipping homes, the goal of which is to buy a home and quickly sell it at a higher price, has spiked across the country. The markets with the largest percentage of flippers are Nevada and Florida, each damaged deeply by the busting of the housing bubble. They are followed by Alabama, Arizona and Tennessee.
RealtyTrac reports:
States with the highest share of flips in 2015 were Nevada (8.8 percent); Florida (8.0 percent); Alabama (7.4 percent); Arizona (7.1 percent); and Tennessee (6.9 percent).
Among states with at least 1,000 single family homes flipped in 2015, those with the biggest year-over-year increase in share of flips were Connecticut (up 23 percent); Oregon (up 21 percent); Maryland (up 19 percent); Illinois (up 18 percent); and New Jersey (up 17 percent)
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Based on city data, flipping was once again prevalent in areas hurt badly by the real estate debacle during the Great Recession:
Among 110 metro areas with at least 250 flips in 2015, those with the highest share of flipping as a percentage of all single family home sales were Memphis (11.1 percent); Fresno, California (9.2 percent); Las Vegas (9.2 percent); Tampa (9.2 percent); and Deltona-Daytona Beach-Ormond Beach, Florida (9.1 percent).
The practice was particularly dangerous financially for investors who started the process at the peak of the housing market in 2006 and held homes until the market collapsed in 2008.
On a nationwide basis, according to RealtyTrac in its:
Year-End and Q4 2015 U.S. Home Flipping Report, which shows that 179,778 U.S. single family homes and condos were flipped in 2015, 5.5 percent of all single family home and condo sales during the year.
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The 5.5 percent share of U.S. home flips in 2015 was up from a 5.3 percent share in 2014, marking the first annual increase in the share of homes flipped following four consecutive years of decreases. The share of homes flipped in 2015 increased from the previous year in 83 of 110 U.S. metropolitan statistical areas nationwide analyzed for the report (75 percent).
The major risk to the current generation of home flippers is that the housing market takes a dip in 2016.
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