WASHINGTON — Home prices are slowing in much of the country, but for people in the business of flipping homes, the third quarter was especially rewarding. “D.C. is one of those markets that’s still pretty…
WASHINGTON — Home prices are slowing in much of the country, but for people in the business of flipping homes, the third quarter was especially rewarding.
“D.C. is one of those markets that’s still pretty on fire and that is an advantage to flippers,” said Daren Bloomquist, vice president of RealtyTrac.
In the city, people reselling homes that they recently purchased and fixed up are seeing a 56 percent return on their investments.
Expanding the view to the D.C. metro area, which includes Virginia and Maryland, flippers on average are selling homes for $107,000 more than they purchased them for.
The numbers put the D.C. area in the top five metro areas nationwide when it comes to return on investments, according to third quarter numbers from RealtyTrac.
In the D.C. area, Bloomquist said when it comes to the number of flipped homes sold, the ZIP code of 20743, which includes Capitol Heights, Maryland, made the top 20 list.
One in four homes sold in the ZIP code had been flipped.
Bloomquist says Maryland is still at the tail end of recovering from the housing market bubble burst. He says the state has a very lengthy foreclosure process, which can last close to two years.
This means many foreclosed homes are still making their way into the market after months in legal limbo.
Some of the foreclosed homes get the attention of flippers, because months of no attention from an owner have allowed many of them to fall into disrepair.
Close to the district, it isn’t as easy to find foreclosed homes, so many investors, according to Bloomquist, have found creative ways to find properties.
Using publicly accessible data, flippers are researching homes in and homeowners in the neighborhoods where they are interested in acquiring a property.
Then they approach homeowners who may be willing to sell even if they are not in foreclosure, Bloomquist said.
The possibility of big profits may be intriguing, but Bloomquist says flipping isn’t for everyone, because it becomes a full-time job for most investors.
Many flippers are under pressure to sell the home quickly and aim to get a home ready for sale 90 days after they buy it.
“We actually saw the reality was the average time to flip in the third quarter was 175 days,” Bloomquist said.