Flipping a house for fun and profit is great TV, and makes business sense in some parts of the country.
Just not ours, not quite yet.
In case this terrible recession has made it seem like flipping was a fever dream, the definition is: buying property at a discounted price, fixing it up so it will sell at market value, then quickly selling it. The most common flips are single-family starter homes between 1,000 and 2,000 square feet.
Data out Wednesday from foreclosure listing firm RealtyTrac shows flipping is making a comeback in parts of the country, mostly those hardest hit by the housing crash. That’s where homes can be bought at the steepest discount.
The story locally shows more caution.
The Seattle metro area, which includes Bellevue and a small part of Pierce County, rings in at No. 15, with a 59 percent increase since last year. Some 821 homes have been flipped so far this year, compared with 912 in all of last year. In the past three years, the average gross profit of flips has been $58,930, and the flip takes about 113 days.
Gross profit doesn’t take into account the cost of repairs, which vary widely by property.
In Pierce County, flips are up 58 percent from 2011, but gross profit is still in the negative — an average loss of $4,857 since 2010. So far this year, the county has seen 267 flips.
Several Washington counties have negative gross profits, including Spokane, at an average loss of $124,358.
The negative numbers were “somewhat surprising to us, but is likely the result of a very competitive flipping market and possibly an unexpected decrease in home prices (unexpected on the part of the flippers),” RealtyTrac vice president Daren Blomquist said in an email.
Thurston County’s not a bad place to flip, though the raw numbers are small. So far this year, 57 homes have been flipped, up from 51 last year. Since 2010, the average time to flip in Thurston is 110 days, earning an average of $52,271 in gross profit.
Nationally, almost 100,000 homes have been flipped in the first six months of the year, and that’s up 25 percent from 2011. California, Arizona, Nevada and Georgia are the top states to flip right now.
In the top metro areas, Phoenix, Las Vegas, Los Angeles and Miami are tops.