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