“Home flipping was hot in 2016, fueled by low inventory of homes in sellable or rentable condition along with a flood of capital — both foreign and domestic — searching for the returns and stability available with U.S. real estate,” ATTOM senior vice president Daren Blomquist said. “The combination of more home flips and a greater share of financing for flip purchases resulted in a 19% jump in the estimated dollar volume of financing for home flip purchases, up to $12.2 billion for the flips completed in 2016 — a nine-year high.”
“Investors in search of flipping returns are increasingly willing to move to secondary and tertiary housing markets and neighborhoods with older, smaller properties that are available at a deeper discount,” Blomquist continued. “Given that many of these markets are more affordable, we are also seeing a higher share of the flipped homes sold to FHA buyers, with that share reaching a four-year high of 19.6% in 2016.”
“And it’s no wonder more investors are joining the home flipping market. The average home flipped sells at $189,900, a gross profit of $62,624. This is a 49.2% return on investment, an all new high for the report which dates back to 2000”
Source: HousingWire, 2016 Year-End U.S. Home Flipping Report by ATTOM Data Solutions
“Average home equity rose by $13,700 for U.S. homeowners during 2016,” said CoreLogic Chief Economist Frank Nothaft. “The equity build-up has been supported by home-price growth and paydown of principal.”
Number of Underwater Homeowners Decreases
Geographic diversification should be a consideration for all investors. Although property taxes are one factor, investors should consider insurance, sales taxes, state & local income taxes, business & corporate fees & taxes, capital gains taxes, local business attitudes and much more to figure a bottom line after tax return.
Mitch Roschelle, partner at PricewaterhouseCooper, which focuses on audit and assurance, tax and consulting services, posted on Twitter “Like I have been saying – you can’t buy a home that’s not for sale.”
But despite the low pending home sales report, another expert disagrees with that notion, claiming the upcoming Spring home buying season will be hotter than ever.
“Based on realtor.com’s inventory and traffic in February, we are anticipating another month of record prices, record low inventory, and record inventory movement,” company Chief Economist Jonathan Smoke said. “Buyers have started the spring buying season early to get their dream home before competition grows in the traditionally stronger spring season – but competition is already heated and will only continue to become more intense.”
SOURCE: Housing Wire
That from 1972 until 2008 it probably made more financial sense to rent than to own your own home in the US. Since 2008 it has been more financially beneficial to own. A real estate property in 2012 is worth 11% more than in 1981 AND you can own it for 63% less than in 1981. (Using average home price. Source: HUD Historical Data)
In 2011, 30% of all houses purchased didn’t utilize mortgage financing? They were purchased with cash. (Source: NAR 2012 Investment & Vacation Home Buyers)