The demise of a previously hot housing market, torn apart by rising mortgage rates, is beginning to impact the once-thriving housing reversal environment.
With interest rates now above 7%, home flipping, which reached new highs in early 2022, is declining as the property market shifts. Home sales have fallen 25% since September 2021, according to the National Association of Realtors (NAR).
in the meantime, atom Data Solutions, the principal curator of real estate data The US Home Flipping Report for Q2 2022 has also been released nationwide. The report shows that his 115,198 single-family homes and condos in the US flipped in the second quarter. These deals accounted for 8.2% of all home sales in Q2 2022, or 1 in 12 deals. Those numbers represent a drop of just under 10% compared to his 1 in 10 home sales rate in the first quarter of 2022. The figure is his third highest since 2000, but some have set off warning sirens.
“Anyone flipping right now needs to look closely at property pricing. We set prices to sell. Today is not the time to be greedy,” said Noah, president of Capital Fund I. Brosius told Bloomberg News. Capital Fund I is a hard his money lender with operations in Phoenix, Colorado and Texas.
Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, shares similar concerns. “The big question is whether the fix-and-flip market will start to lose momentum as overall home sales have fallen dramatically over the past few months and financing costs have practically doubled over the past year.”
Most home flippers are small contractors that buy homes, add improvements like new countertops, paint, and flooring, and sell them at a profit.
Lawrence Yun of the NAR said that for now, many are secured with plain old cash, and some buyers are looking to land deals without the help of banks or mortgage companies.
“People with cash are still in the market and see better opportunities because there is less competition for buyers,” Yun said.
Another bright spot for Homeflipper is that more distressed properties are hitting the market now that pandemic-era foreclosure bans have expired.
Learn more about Benzinga’s real estate investments.
photo courtesy Tima Miroshnichenko from Pexels
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