Home flipping falls as South Florida prices rise

Higher prices led to fewer flipped homes across South Florida in the third quarter, a new report shows.

Palm Beach, Broward and Miami-Dade counties had 940 flips in July, August and September, down 8 percent from the same period a year ago, according to the RealtyTrac listing firm.

RealtyTrac defines a flip as a single-family home resold within six months of the purchase.

“You really had a sweet spot for flipping as prices were bouncing off the bottom last year. But now we’re seeing investors pull back,” said Daren Blomquist, a vice president of the Irvine, Calif.-based firm.

“I think it’s a sign that the market is more under control.”

During the housing collapse, lenders wouldn’t offer mortgages on homes in disrepair, shutting out first-time buyers and young families. Investors bought with cash, fixed up the homes and quickly resold them for a profit.

“Investors stabilized home prices during the recovery by resetting the market,” said Rick Sharga, an executive with Auction.com, an online real estate marketplace. “They made it easier for borrowers to get loans.”

As flipping declines, sharp home price gains could start to level out — a necessary part of a sustained recovery, Blomquist said.

The gross profit for South Florida investors in the third quarter was $69,463, up from $56,946 a year ago, RealtyTrac said.

Statewide, flipping declined 20 percent in the third quarter from a year ago. Tampa and Orlando had the biggest annual decreases at 47 percent and 28 percent, respectively. Nationally, flipping fell 13 percent in the quarter.

Now that the market has turned, some investors are sizing up short sales and homes with liens — properties they may not have considered a year ago.

“You need to be aggressive and persistent to find the deals,” said Lex Levinrad, founder of the Distressed Real Estate Institute in Deerfield Beach.

Read the Complete Story On The Sun Sentinel Website>>

Send this to a friend