With the myriad of federal government interventions, speculators have once again infested the housing market with quick flips.
Flip 1:
Last purchased: Jan 5 2009.
Last purchased for: $380,000
Flippers Gross Markuptm: $269,000
Days from purchase to market: 56
Flip 2:
28472 Charreadas Laguna Niguel
Last purchased: January 23rd 2009
Last purchased for: $495,000
Gross Flippers Markuptm: $154,000
Days from Purchase to Market: 41
This is just 2 of many currently on the market. It’ll be interesting to see just how much demand there is for houses with several hundred thousands tacked on where buyers would have paid before. More interesting to me is how long these will take to sell. While both are in superficially desirable areas, both have fundamentally flawed locational problems. (Charreadas is the most obvious, just look at where the 73 is in relationship) I did a drive by of when it was on the market just to see just how much noise there was. It was quite loud at rush hour.
Guess the final sales date and sales prices!
Home # 1 – Will sell in October 2009 for $ 425,000.
Home # 2 – Will sell in February 2010 for $ 405,000.
These should be fun to watch.
I’ve been noticing that the San Diego market is going crazy with flippers now. “Investor owned” is becoming a big thing… these guys are just bidding on multiple bank owned properties, then turning around and selling them for a markup as soon as they hold the deed.
Incidentally, I haven’t seen this addressed – I thought last night about how Obama’s ultimate answer to the economy is probably going to be gross inflation when he finally realizes they can try just printing money. In that scenario, even inflated mortgages reduce in terms of income:property value, assuming that jobs catch up in a couple of years. I hate inflation but I have a hunch that’s where he’s going to take us.
I have just started to read your blog and I really like what I see so far.
This flipping of homes (we see on TV shows) was not really done a lot in our market (Charlottesville Real Estate Market).
What I am curious about is this. Are people still doing this in your area of California?
Are these people part of the bail out issues?
thanks for your post!
Yes, there are flippers galore. Real Estate here is like a religion; you either believe or you don’t. It’s going to take a lot to break people’s faith.
Are they part of the bail out issues? Does a bear crap in the woods?
Just remember that current flippers are opportunists. They got out of the game when they should have and are now jumping in too early. They’ll get burned and learn their lesson. Only when we have capitulation will the cycle begin anew; valuations are still FAR too rich on the coast.
Chuck
Hey Chuck,
You’re not down on opportunists are you?
Whoever bought the Coto house got one hell of a deal. That was a steal at $380,000. I checked the pictures from the listing when it was a short sale and they’ve done a nice remodel since they picked it up as an REO. They spent six figures on the place.
It only lasted 7 days on the market and it’s in escrow. They made a great investment and will make a quick $100,000. Good for them! That is capitalism!
The Laguna Niguel house is a different story. It was a dog when it was an REO and with the money they spend to remodel they’ll be lucky to make money. No matter how much they spent it will always be a bad LOCATION.
The speculators are what got us into this mess. If you look at amount of speculators who are under water and factor in the amount of defaults that are still on the rise, you’ll understand why opportunists are not good for the economy. We all suffer due to deflated housing prices.