FLORIDA
Home Flipping on the up in the US
New Developments Attract Big Investors
BY DREW HOOK
Nationally, there has been little change in house flipping in the past year, but flipping is making a comeback in several Florida markets. House flipping is a practice that some believe is an indicator of an over-heated housing market. In the United States alone it made up a stable of all home sales during the past year, mirroring a steady increase in home prices.
The good news: that flip rate is roughly in line with the non-housing bubble years and well below the 8.6 % flip rate of all home sales in 2006. House Flipping is making a comeback in places such as Las Vegas and Miami, which saw high levels of flipping activity during the previous boom.
House flipping is a unique housing market metric for two reasons. First, it is a speculative undertaking where investors are betting on turning a profit, and has historically occurred at high rates just before a market peaks. Second, flipping usually entails removing a home from a particular price point in the market and moving it to a higher price point through improvement. That movement creates competition for homebuyers who may be looking to build sweatequity on their own. But flipping activity also provides improvements to the housing stock for buyers who don’ t have time or cash to improve a home themselves. Flipping reached a peak in 2006, but is it actually on the rise again? Looking at all the home sales in the last year gives us an idea:
• In the United States, flipping activity has held steady over the past year at around 5 % of all home sales, and is down from the peak of 8.6 % in the first quarter of 2006;
• Over the past year, flipping activity has increased most in Miami, growing from 4.7 % to 6.4 % of all home sales. Other Florida markets have also seen relatively large increases.
Flipping requires three things:( 1) a market where home prices are appreciating,( 2) a cheap supply of homes to buy and flip, and( 3) ready buyers to purchase the flip.
Candice Schultz, CEO of Prime Property Global( PPG), already a successful investor in both local and offshore real estate, has brought along a unique real estate solution for a select number of investors. Candice assists South African investors with new build investments, offering them an opportunity to turn quality property investments into cash within a 12-month period.
The U. S. housing market isn’ t flipping out just yet, but there are signs that some areas are approaching their previous flipping points. While this isn’ t of concern in places where flipping activity is low relative to the national average, such as Birmingham there are signs that markets such as Florida may soon reach an historical high level of flipping.
For more info contact Devon Brough on + 27 62 236 5180 or email info @ primepropglobal. com
RESOURCES
Trulia, Prime Property Global
48 JUNE 2016 SA Real Estate Investor www. reimag. co. za