Report: Nevada one of worst states for flipping homes
If you’re positive that investors are making big bucks flipping homes on your block for quick sale, think again.
A new report from California-based real estate research firm RealtyTrac shows Nevada was one of the worst states for flipping activity in the first six months of 2013.
Investors in Nevada flipped 2,932 homes from January to June, a 34 percent decline compared with the first six months of 2012. The average purchase price for a flipped property, defined as a home bought and resold in the same six-month period, was $162,472. That included an average gross profit of $15,205, or 9 percent.
Nationally, investors flipped 136,184 homes, for a gain of 19 percent. The average purchase price was $200,942, with a profit of $18,391, also a 9 percent margin. Buyers typically purchased at a 5 percent discount on market value, and sold at a 1 percent premium.
Nevada may be sitting out the flipping game only because investors grabbed the best deals in 2011 and 2012, experts said. Plus, a limited supply of foreclosures could be hurting flipping here, too.
Daren Blomquist, RealtyTrac’s vice president, said flipping has tapered off in markets where distressed bargains are dwindling. He added that flipping declined in Las Vegas, Phoenix and Southern California. Still, flipping jumped in more than two-thirds of markets, including New York, Chicago and several Florida markets. Flipping is most profitable in markets where home-price recovery is still just beginning, and recent rebounds in foreclosure activity mean distressed inventory at a discount.
After changes in state laws and bank policies, foreclosures in Clark County slumped from 4,000 in late 2011 to about 1,500 in May. First-time notices of default fell to less than 100 in June, as banks tried to digest the effects of new and pending state foreclosure laws and several pending court decisions that could affect repossession practices.
Craig King, chief operating officer of Reno real estate brokerage Chase International, said his market has experienced a 32 percent drop in flips, likely due to a falloff in distressed sales.
“It’s actually a positive sign of the housing recovery we are experiencing,” King said. “While there will always be a market for sharp home flippers, our marketplace numbers indicate that home flipping here is back to a place best left to the professionals.
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.