When respected observers like the editors of Barron’s are able to report that more than 10% of the country’s residential sales are now due to house-flipping, it’s a clear indication of the continuing strengthening in flipper activity. It’s now nearly back to 2006 levels.
By definition, house-flipping is the act of selling a home that has been owned for less than two years. Back in the early 2000s, the rapid escalation of residential prices created a hard-to-resist opportunity for anyone with enough cash for a down payment. There were ample examples of inexperienced Costa Mesa do-it-yourselfers who found success and quick profits with relatively little effort. Throughout the nation, holding periods could be brief as long as price appreciation reached runaway levels—right up until the bubble burst.
Needless to say, the global financial meltdown and resulting fallout quickly squelched the allure of house flipping. According to the industry trackers at CoreLogic, U.S. quarterly flipping rates slumped for the next five years. Although experienced professionals were able to profit from sharp-eyed buys and skillful rehabs, for the most part, the practice labored under something of a public relations cloud.
But there’s little reason to worry that this go-round could cause another housing crisis. Experts agree that this time, the impetus for house flipping should be “less of a concern” (the Wall Street Journal). House-flipping “has evolved”—now dominated by pros who are buying older homes and converting them into the move-in ready residences today’s buyers prefer. According to CoreLogic, short-term flipping (6 months or less) is on the wane, partially due to more extensive renovation undertakings.
The likely takeaway for Costa Mesa buyers and sellers should be encouraging. For owners of older properties who are unenthusiastic about undertaking renovations but anxious to move on, a healthy corps of house-flippers should provide prospective buyers. For house hunters eyeing this season’s previously owned Costa Mesa homes, the difference in value added by a thoroughgoing renewal can be well worth the premium asked—especially considering today’s low home loan terms. Call me to chat about this spring’s lively market!
We are built on a philosophy of Heritage & Hustle L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s L3 mission to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, L3 has grown to a full staff of 20 serving over 300 clients a year. L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact L3 today at 714-444-4663 or email us at firstname.lastname@example.org