Real Estate Investor Magazine South Africa April 2016 | Page 61

H

ome flipping - buying and reselling a home for a profit - has
risen in some U.S. housing markets, prompting concerns that
local housing bubbles could be developing
Profits generated by home flipping also hit a 10-year high, with home
flippers netting an average $55,000 per sale before renovation and
transaction costs. Profits topped $100,000 in expensive markets such as
New York and Los Angeles.
There were also indications smaller investors were starting to pile in
on the action. The number of home flippers rose to levels not seen since
2007, while the number of home flips per individual investor fell at the
same time.
Three metro areas in Florida, a housing market that has been prone
to overheating, saw the largest increase in home flips. Lakeland,
Jacksonville, and Homosassa Springs all saw home flips rise 40 percent
to 50 percent.
The Miami metro area had the most homes flipped of any market
nationwide. In 2015, 10,658 were flipped in Miami, representing 8.6
percent of all Miami-area sales for the year and up 4 percent as a share of
all sales from 2014.
The report defines a home flip as any transaction that occurred on the
same property twice within 12 months. It surveyed 110 U.S. metro areas.
Home flipping grew nationally as 179,778 homes were flipped last
year, the highest level since 2007. The number, however, was well under
the 2005 peak of 259,192. The share of flipped homes edged up to 5.5
percent of sales from 5.3 percent in 2014.
Florida in particular remains an attractive market in the US, with it’s
reputation as the countries #1 retirement