Friday, September 22, 2006

Softened Market Teaches Flipper a Lesson

The real estate boom has brought investors from all walks of life and occupation to purchase real estate in the hopes of making a profit since the past few years. Today with the market softened investors are faced with the possibility of having no or little profit from their venture. Nearly 1 in 5 flippers who sold from April to June lost money on the deal, which is the highest level in 2.5 years according to HomeSmartReports.com. This report will be released an show flipping activity in 147 metro areas. With speculators pulling out of the market, it is accelarating the decline in home sales this year. Life has become hard for sellers, while buyers have more choices and incentives, as sellers cut prices. However, there are sellers holding onto their high price tag, with dreams of making a profit. The four hottest real estate markets such as California, Florida, Arizona, and Nevada has hit the hardest with slow sales for flippers. Nationally, the level of real estate flipping declined to 4.7% in a quarter, down from a high 6.4% in first quarter of 2005. With the number of speculators bailing, the number of inventory of homes has hit an all time high in the US.

Orlando Flipping Statistics:
  • 5.3% of homes flipped in past 5 years
  • 6.0% of homes flipped in 2nd quarter 2006
  • $33,750 profit flipped homes in 2nd quarter 2006
  • 11.7% flippers lost money 2nd quarter 2006
  • $17,150 lost money in 2nd quarter 2006

Courtesy of Planet Realtor and HomeSmartReport.