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cent of homes flipped were purchased by the home flipper with cash — compared to only 37 percent who purchased with cash at the height of the flipping boom,” Blomquist said. “Spending their own money rather than other people’s money is keeping flippers conservative. On average they are buying the homes they flip at a 27 percent discount below full market value and selling them at a 6 percent premium above full market value, helping to deliver strong flipping returns on average.” The share of home flipping reached new all-time highs in Q1 2016 in nine of 126 metropolitan statistical areas analyzed (7 percent) including:
HOME FLIPPING INCREASES 20 PERCENT IN Q1 2016 TOA 2-YEAR HIGH Home flipping activity increased 20 percent to a two-year high in Q1 2016, according to RealtyTrac’s recently released Q1 2016 U.S. Home Flipping Report. The report, released in early June, shows that 6.6 percent (43,740) of all single-fam- ily home and condo sales in the first quarter of 2016 were flips, a 20 percent increase from the previous quarter and up 3 percent from a year ago, to the highest rate of home flips since the first quarter of 2014. Home flipping has been on the increase for more than a year and a half, helped by falling interest rates and declin- ing inventory against which flippers had to compete, noted Daren Blomquist, senior vice president at RealtyTrac. “While responsible home flipping is helpful for a housing market, excessive and irresponsible flipping activity can contribute to a home price pressure cooker that overheats a housing market, and we are starting to see evidence of that pressure cooker environment in a handful of markets,” Blomquist added. “The good news is that — despite the 20 percent jump in the first quarter — home flipping nationally is not far above its historic norm, and home flippers in most markets appear to be behaving rationally and responsibly.” For the report, a home flip was defined as a property that was sold in an arm’s-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by RealtyTrac in more than 950 counties accounting for more than 80 percent of the U.S. population. The 6.6 percent share of total
• Baltimore, Maryland • Buffalo, New York • Huntsville, Alabama • New Orleans, Louisiana • York-Hanover, Pennsylvania • Seattle, Washington • Virginia Beach, Virginia • Bakersfield, California • San Diego, California
SOURCE :: RealtyTrac
REPORT LOOKS AT CHINESE INVESTMENT IN U.S. REAL ESTATE A new report from the ASIA SOCIETY , “Breaking Ground: Chinese Investment in U.S. Real Estate,” aims to address state-side anxieties and paint a clearer picture of the impact on the U.S. economy and jobs numbers from the increasing amount of capital coming in from China. It is the fourth in a series of reports beginning in 2011 exploring the implications of Chinese real estate investment in the United States and attempting to “ground the debate in an authoritative and comprehensive analysis of the in- vestment trends and motivations.” According to the Asia Society, the reports have found that “while some of the misgivings about Chinese invest- ment were warranted, Chinese investment in the United States has and will continue to be an overall benefit for the economy.” The report notes a rapid and widespread entry of Chinese investors, both firms and individual, into the U.S. real estate market. Chinese direct investment in U.S. real estate was negligible until 2010 but has since grown drastically and visibly, according to the report’s authors.
home sales that were flips in Q1 2016 was still 26 percent below the 9.0 percent share at the peak of home flipping in Q1 2006, but was 55 percent above the recent trough in home flipping — 4.3 percent of total home sales in Q3 2014. “In the first quarter, 71 per-
8 | think realty magazine july :: august 2016
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