Flippers have moved to the coast, a new quarterly report from RealtyTrac suggests.
The practice where a home is bought and sold within six months — in the third quarter of 2013 — fell 35 percent from the months of April through June, and is down 13 percent from the third quarter of 2012. The level of home flipping in California is down 24 percent from the prior quarter and 9 percent from 2012.
Real estate investors made an average gross profit of $ 54,927 on single family home flips, up 12 percent from the average gross return of $ 48,893 over the third quarter of 2012. In California, profits averaged $ 104,029.
And that’s because the investors have turned their attention to high-end homes in four coastal California markets — Los Angeles, San Francisco, San Jose and San Diego — and New York.
Daren Blomquist, vice president of RealtyTrac, says decreasing foreclosures have brought down the number of properties the investors are snatching up to rehab and flip at a profit.
Because big-ticket homes tumbled into foreclosure — or were thrown into the walk-away pile when equity tanked — real bargains have been materializing in higher priced markets. That, and investors who jumped into the affordable buying pool have opted to sideline the property to wait for median prices to mount.