By Natalie Wise
Flipping houses, which involves purchasing a home, renovating it and reselling it for a profit in a relatively short period of time, has become a phenomenon in recent years. But is it still profitable and popular? Though the housing market is bouncing back and making the venture more difficult, house flipping is still possible in at least some cities, particularly those in California.
Overall, home flipping decreased by 35 percent for the third quarter of this year, according to RealtyTrac. In the final quarter of 2012, home flipping reached its height of popularity, with some 67,000 home flips. As of the third quarter this year, the tally was 33,000.
Although the home-flipping market is down overall and investors are slowing down in even the best markets, profits are still above the national average in many cities. The report stated that more than three-fourths of all high-end flips were in five markets: the New York metro area and four coastal California markets.
The best city to flip a home in the third-quarter of 2013 was San Jose-Sunnyvale-Santa Clara, Calif. While the number of houses flipped declined 40 percent from the previous quarter, gross profits from flipping were nearly 3 times the national average.
Other cities in California that were the best for flipping included: San Francisco-Oakland-Fremont, Oxnard-Thousand Oaks-Ventura, and the popular house-flipping area of Los Angeles-Long Beach-Santa Ana. This area had the highest number of house flips in the country for the third quarter: 2,116.
Ocean City, N.J., also made it onto the list, as well as Seattle-Tacoma-Bellevue as the only two areas outside of California. The other California cities that are still house-flipping hot spots are: San Diego-Carlsbad-San Marcos, Santa Rosa-Petaluma, Salinas and Vallejo-Fairfield.
Considering the average profit on a sale of a flipped house in 8 out of 10 of these top markets was $100,000, there is still money to be made from this segment of the housing industry, despite increased competition and decreased inventory.