Home flipping – buying a home and reselling it within 12 months, hopefully for a profit – is the American entrepreneur’s reaction to the vagaries of the housing market. When these gutsy people perceive a big profit opportunity, such as soaring home prices, they pile into the market, and profit grows on trimmed trees and freshly painted walls and rehabbed bathrooms, and flipping volume soars, and the time it takes to complete a flip drops, and nothing can go wrong.
Then something goes wrong. The process reverses, and it takes much longer to complete a flip and volume plunges, and so do profits, and when it gets bad enough, big losses decimate that spirited industry.
And now, something is going wrong. RealtyTrac reported that in Q2 of 2014 fewer than 31,000 single-family homes were flipped across the US, or a 4.6% share of all single-family home sales, down from a 5.9% share in Q1 and down from a 6.2% share in Q2 2013. And single-family homes sales overall were already down from last year.
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