Slowing Home Prices aren't Curbing Flips in these Cities
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Slowing Home Prices aren’t Curbing Flips in these Cities

Home Remodel Slowing Home Prices

Despite the U.S. ostensibly shifting to more of a buyer’s market in 2019, flipping is still growing in certain major metros.

For about six straight years, home prices have seen consistent growth, but new data show that home price growth is slowing down in most states.

Home price growth has slowed in 33 states and in 71 of the nation’s 100 largest markets, according to a report from Black Knight. Annual appreciation slowed by 1.3 percent from February to October, according to Black Knight’s Mortgage Monitor report. October posted growth of 5.4 percent, down from a four-year high of 6.7 percent in  February.

“Flattening home price growth over the last four months has led to the slowest annual appreciation rates in nearly three years,” Black Knight wrote. “While slowing has been observed across the majority of the country, western states – led by California – are seeing the most deceleration. The annual rate of appreciation in California has slowed from over 10 percent as recently as February 2018 to less than 5 percent as of October 2018, falling below the national average for the first time since the housing recovery began.”

Despite the U.S. ostensibly shifting to more of a buyer’s market, flipping is still growing in certain pockets.

Flips are popular, in part, because first-time buyers want affordable homes that entail little upfront improvements, according to Charles Tassell, chief operating officer of the National Real Estate Investors Association.

“(Millennials) want to move into a home that requires minimal work,” Tassell told Realtor Magazine. “A house that has already been rehabbed or flipped [and is priced lower than new construction] is really what they are looking for.”

Home flipping profits nationally have decreased over the last four years, dropping from a 42 percent return to 38 percent, according to Realtor’s analysis. Despite that, the total number of flips nationwide rose 3.5 percent in September compared to a year earlier, Realtor reports.

In its recent analysis, Realtor looked at home sales in the 200 largest metro areas for July, August, and September 2018 and compared them to the same period of 2017. Realtor defined a flip as any type of home bought and resold within a three- to 12-month period.

Here are the metros yielding the largest growth in home flipping:

Raleigh, North Carolina

Median home price: $340,000
Increase in home flips: 63.4%
Difference between purchase and sale prices: 32 percent

Charlotte, North Carolina

Median home price: $323,300
Increase in home flips: 42.5 percent
Difference between purchase and sale prices: 36 percent

Orlando, Florida

Median home price: $300,000
Increase in home flips: 37.1 percent
Difference between purchase and sale prices: 41 percent

Phoenix, Arizona

Median home price: $330,000
Increase in home flips: 35.7 percent
Difference between purchase and sale prices: 36 percent

Las Vegas, Nevada

Median home price: $320,000
Increase in home flips: 33.7 percent
Difference between purchase and sale prices: 38 percent


Category: News
Tags: flipping