House Flipping Returns Due To Demand, Inventory Shortage

Trassenheide,_Die_Welt_steht_KopfThe housing market is picking up steam like a freight train, but we’ve unfortunately run into a major roadblock: lack of inventory. Tons of homebuyers are actively searching for their dream home, however their search has turned into more of a journey.

The problem is that a vast majority of homebuyers, especially first-time buyers, prefer move-in ready properties. They’re simply looking for a roof over their head, not an enormous home improvement project. Renters feel exactly the same way and either run from outdated properties or squeeze landlords for a rock bottom price.

Due to high demand, house flipping is making a major comeback with real estate investors scooping up properties left and right. In fact, according to the National Association of REALTORS®, investors purchased 18 percent of houses in the U.S. in August 2012. The properties will either be remodeled and rented, or flipped for profit within a short amount of time.

Lawrence Yun, NAR chief economist, stated: “The West and Florida markets are experiencing inventory shortages, which are placing pressure on prices.” To capitalize on such shortages, house flippers are flocking to Florida and the West Coast.

When flipping houses, investors tackle two things first: kitchens and bathrooms. “People buying a house look first at kitchens and baths,” says Kermit Baker, director of the remodeling futures program at the Joint Center for Housing Studies at Harvard University. Plus, statistics show that bathroom and kitchen upgrades are one of the best ways to boost interest as well as value.

As house flippers continue to purchase and remodel properties, we can expect the quality of homes for sale to improve. Hopefully higher quality listings will spur more home sales.

source: Fix&FlipNet