Workers repair a home in the Pittsburgh neighborhood with funding from the federal Neighborhood Stabilization Program. The fence was erected partly to deter vandals from stripping the house of copper wiring, plumbing and appliances.
Before the real estate bust, the practice of “flipping” houses for a quick profit was so popular that it spawned a TV series on A&E.
It seems the practice and profits are back, according to RealtyTrac, which reported Friday that house flipping – buying a home and selling it within six months – is up 19 percent in the first half of this year from a year ago.
Except in metro Atlanta, where it is down 20 percent.
The reason for the local lag: Large real estate investors who have gobbled up foreclosed and other distressed properties, the usual target of house flippers, have taken a lot of the inventory off the market.
But Eugene James of Metrostudy, which tracks local real estate trends, expects to see more flipping in metro Atlanta as prices rise.
“Those [investors] who were fortunate enough to buy real low will start cashing in,” James said Friday. “You’ll see some taking advantage of an increase in prices and low inventory volume.”
Georgia Realtors, a trade group, reported Friday the median sale price for homes throughout the state is up 35 percent. The Atlanta Board of Realtors said the median price was up 7.5 percent in May locally.
“Out of the 100 markets we analyzed for the report, 32 had declining flipping numbers, including perennial flipping hot spots like Las Vegas, Phoenix, Southern California and Atlanta,” Daren Blomquist, vice president at RealtyTrac, said in releasing RealtyTrac’s report.
“Still, flipping was on the rise in more than two-thirds of the markets, including New York, Washington, D.C., Chicago and several Florida metros.”
In the first half of this year, 7,788 single-family homes in metro Atlanta were flipped, down 20 percent from the same period a year ago, RealtyTrac said. The average original purchase price among the flipped homes was $176,358, and investors lost an average $9,789 on the sale, or 6 percent.
By comparison, 17,707 homes were flipped in Florida during the first half of 2013, up 48 percent from a year ago. The average Florida home was purchased for $121,243, and investors made an average $30,861, 25 percent, on the sale.
RealtyTrac said investors nationally made an average 9 percent return on their initial purchase price. That was up 246 percent from an average return of $5,321 in the first half of 2012 and an average loss of $13,206 in the first half of 2011.
Despite falling out of favor with investors, the practice of flipping continued on A&E’s “Flip This House,” which still airs.
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