Buying a home and reselling it within six months to make a profit, commonly known as flipping, is back -- another indication of a recovering housing market.
A report by RealtyTrac shows that 156,862 single-family homes were flipped in 2013, a 16 percent increase over 2012 and a whopping 114 percent increase over 2011. The average gross profit, or difference between the flipped price and the price paid for the home, was $58,081 in 2013, up from an average of $45,759 a year earlier.
It wasn't easy
"Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase," Daren Blomquist, vice president of RealtyTrac, said in a release.
Fewer foreclosure flips
Blomquist noted that 21 percent of all properties flipped in 2013 were foreclosures, but that's down from the 27 percent in 2012 and 32 percent in 2011. Even so, flipped homes were purchased for an average of 13 percent below market value in both 2012 and 2013.
More ritzy flips
Investors are finding buyers willing to pay more for flipped homes. Flips on houses priced above $400,000 increased by 36 percent in 2013 compared with 2012, while flips with a sales price at or below $400,000 increased by 17 percent over 2012.
Time on market stalled
Average time on the market for a flipped home nationwide was 84 days in 2013, down from 86 days a year earlier and 100 days in 2011.
Where the flips are
Regionally, areas with the biggest increases in flipping in 2013 included Virginia Beach, Va., with a 141 percent increase over 2012; Jacksonville, Fla.; Baltimore; Atlanta; Washington, D.C., and Detroit. Those with the biggest decreases included Philadelphia, Phoenix, Tampa, Fla., Houston and Denver.
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