(NEW YORK) — Home flipping is making a comeback in new parts of the country. Deals rose nearly 20 percent compared with last year, RealtyTrac reports.
House flipping, in which investors buy homes and sell them within six months for a profit, thrives in environments where home values are surging and inventory is low. Combined with low interest rates, a slowly improving jobs market, and greater consumer confidence, more Americans are now willing to buy.
House flipping deals are on track to hit a record this year, RealtyTrac reports. Profits were up 19 percent in the first half of 2013 from a year ago and 74 percent higher than 2011. Profits are also climbing to the highest in seven years, with investors making an average $18,391 on each sale, more than triple returns in the first six months of 2012 and compared with losses of $13,206 two years ago.
“Flippers need to buy low and sell high, so flipping is most profitable where the home price recovery is in its early stages and where a recent rebound in foreclosure activity allows investors to find distressed inventory at a discount,” said Daren Blomquist vice president at RealtyTrac.
But this comeback brings a shift in the country’s flipping hotspots. As large scale institutional investors scooped up huge groups of distressed properties in markets worst hit by the housing bust, prices rose in traditional flipping markets, like Atlanta and Phoenix, making them less attractive to buyers.
New profitable cities in the house flipping industry include Pittsburgh; Daytona Beach, Fla.; and Charleston, S.C.
Copyright 2013 ABC News Radio
Cristina Alesci Seth Fiegerman and Charles Riley, CNN
John Clyde, KSL.com
Jeff Peterson, Deseret News
Madison Park, CNN