Why does it matter?
Partly because it implies a rising speculation in the market, in which investors are betting more on the trend than the underlying fundamentals. It tends to happen a lot just before a market peaks – it was, as you might recall, a very popular notion just before the housing bubble burst.
Should we worry? After all, that frenzy of gold-digging, reality-television inducing activity was the clearest sign that the market was out of control and a painful correction was coming.
But McLaughlin, at least, seems optimistic.
After all, there is no epidemic of foreclosures, no tidal wave of defaults. And a house-flip may remove a home from the market and push its price up quickly – but that’s not bad when it is because the investor-owner has made improvements.
And that can be a positive thing, adding value quickly to a property, McLaughlin said.
“That … creates competition for homebuyers who may be looking to build sweat-equity on their own, but it also provides improvements to the housing stock for buyers who don’t have time or cash to improve a home themselves.”
Flippingest metro areas in the U.S.
Metro ……….. % Flips, 2016
Las Vegas, NV 10.5%
Daytona Beach, FL 9.0%
Tampa, FL 8.4%
Memphis, TN 8.2%
Fresno, CA 8.2%
Nashville, TN 8.1%
Fort Lauderdale, FL 8.0%
Knoxville, TN 7.6%
Tacoma, WA 7.6%