Rising home prices are bringing more house flippers out of the woodwork. This may be a sign of an overheating housing market.
The number of active home flipping last year was the highest in nearly a decade, and it is only growing.
Nearly 180,000 family homes and condos were flipped in 2015, according to RealtyTrac. A home that is bought and sold again within the same 12 months is defined as a flip. Home flipping made up 5.5 percent of all sales last year, the first increase in the flip share after four years of shrinking. Flipping increased in 75 percent of U.S. markets, and the profits are growing as well.
Daren Blomquist, senior vice president at RealtyTrac: “As confidence in the housing recovery spreads, more real estate investors and would-be real estate investors are hopping on the home flipping bandwagon. Not only is the share of home flips on the rise again, but we also see the flipping trend trickling down to smaller investors who are completing fewer flips per year.”
Jim Pinson works with investors to flip houses in Chicago. He also does two or three flips of his own each year. Home prices in Chicago have not soared as much as in other parts of the nation. But don’t worry, many distressed homes available for sale and plenty of investor demand.