We’re faced with a lot of uncertainty in America right now, but this Thanksgiving season, there is plenty for which house flippers can be thankful. Here are just a few of the most promising facts and figures to add to your list of things to be grateful for this November.
- House flipping is at a six-year high.
Housing data firm RealtyTrac has announced that house flipping is at its highest level since 2010. In the second quarter of 2016, a total of 51,434 single family homes were flipped. That’s an increase of 14% from the previous quarter and 3% from the same quarter last year.
- House flipping is helping the housing market.
Under usual circumstances, a high level of house flipping is seen as a concern, because it might indicate that we are heading for another housing bubble or that homeowners are facing a high number of foreclosures. Right now, however, we are looking at housing inventory shortages around the nation, and house flipping is actually helping increase the number of viable options for home buyers. As PBS reports, rehabbing foreclosed homes in struggling areas helps create affordable housing options in areas that desperately need them.
- Profits from house flipping are up.
In the second quarter of 2016, average gross profits on house flips around the country reached $62,000, according to RealtyTrac. That figure sat at $59,250 the previous quarter and $57,900 the previous year. Currently, the average sale price for a flipped home in the US is $189,000, which means that investors are buying rehab properties on the front end for an average of $127,000. That figure is nothing to balk at, but it’s a very reasonable upfront investment to make for such strong returns, particularly with the right house flipping loans in place. Residential rehab loans from reputable lenders help make the entire flipping process faster, more secure, and more lucrative.
- Huge profits can be made in the high-end market.
A recent article highlighted nine cities where the average gross profit per flip is over $100,000. Of course, the starting prices in these cities are much higher, but the ultimate ROI is well-worth the front-end investment for savvy house flippers. The city at the top of the list is San Jose, with homes grossing an average profit of $161,000. Second place goes to nearby San Francisco with $146,000.