Even as local real-estate prices soar, home flipping is still a big business in South Florida.
While it’s getting harder to find a good deal, flippers say they’re riding the wave of rising home values to steady profits— and they don’t expect a crash that will leave them underwater.
Nearly 1,400 single-family homes were flipped in Miami-Dade, Broward and Palm Beach counties during the second quarter of 2015, according to a report from RealtyTrac released Thursday.
That’s about 10 percent of overall home sales, the highest rate among major metro areas in the U.S. Around the nation, only 4.5 percent of sales were flips. RealtyTrac defines a flipped home as one that sells twice in a single year.
“South Florida is a hot spot,” said Daren Blomquist, vice president at RealtyTrac.
Blomquist said that the region’s high rate of foreclosuresand strong record of price growth make flipping a good bet in South Florida.
Even so, local home flipping is slowing somewhat, with the number of flips down about six percent year-over-year. “The prices are starting to hit a level that is out of the sweet spot for a lot of flippers,” Blomquist said. “We’re seeing the number of flips come down and that to me is a sign that we’re in a sustainable housing economy and not a bubble.”
Flips accounted for nearly 14 percent of all sales in South Florida during the headiest days of the bubble, RealtyTrac found.
Although flipping is down slightly, the profits are still there. The average flipped home in South Florida cost $220,000 to buy but sold for $302,000 about six months later, RealtyTrac found. That’s a healthy gain even after repairs and closing costs are taken out