Spring is nearly upon us, which means that the ideal time for buying investment properties is winding down, and the ideal time for selling is ramping up. As you get ready to make the most of the spring housing market, here are some factors that you should keep in mind.
According to a new report out of RealtyTrac, house flipping in twelve metropolitan areas has reached a peak that was originally set in 2005. Profits in these areas are at a 10-year high for house flippers, who averaged $55,000 gross profit per sale in 2015. In the most expensive markets like New York and Los Angeles, profits exceeded $100,000 per flip.
Couple this with the fact that house flipping rates are now 5.5% of the total housing market. The number of investors who flipped at least one property in 2015 was at its highest level since 2007. At the same time, the number of flips per investor was at its lowest level since 2008. In other words, more investors are getting into the game, but many are only flipping one or two properties per year.
That means that this spring there will be a plethora of competition, but more experienced house flippers with strong financial backing are likely to outmaneuver their less experienced competitors.
It’s also important to note that spring will be very much a seller’s market. Housing inventories are hovering around a four-month supply. Realtors like to have at least a seven-month supply of listings heading into spring. With the current low inventories, sellers will have lots of buyers competing for their homes. This is great news for house flippers who have properties ready to sell over the next few months.
Additionally, the interest rate on 30-year fixed-rate loans has gone down this year, whereas everyone expected it to go up. This means that more people will be able to buy homes, and it should mean that home prices continue to go up by 4-5% this year.
If you are hoping to purchase an investment property this spring, act quickly. Prices will only go up as time goes on, so be sure to secure your house flipping loans as soon as possible so that you can be competitive in the marketplace.
Here at ZINC Financial, we are currently able to fund residential rehab loans within seven to ten business days. We can also provide investors with the necessary paperwork to show that their loan is preapproved. Give our office a call today at 559.326.2509 to learn more.