This piece originally appeared on Money.com.
House flipping. The practice where the same home is sold twice in a 12-month period, is at a six-year high, according to data from RealtyTrac.
Over 51,000 single family homes and condos were flipped in the second quarter of 2016, 14% more than in the first quarter and 3% higher than a year ago and the most overall since 2010. Almost 40,000 investors flipped a house in Q2, also a six-year high.
Why is house flipping back in vogue? “Home flipping is becoming more accessible for smaller operators thanks to an increasingly competitive lending environment with more loan options for real estate investors, who are also benefitting from the historically low mortgage interest rates,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.
It’s also a sign of an improving housing market. New home sales are at their highest since 2008, aided by low mortgage rates and an improving job market.
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Not that you should jump on the home-flipping bandwagon. As MONEY has written, the practice was one of the “most notorious drivers of the financial crisis.” And while more and more flippers may be financing their purchases, more than two-thirds are using cash.
A recent analysis RealtyTrac ran for MONEY showed that “12% of flips sold at break-even or at a loss before all expenses. In 28% of flips, the gross profit was less than 20% of the purchase price.” Not exactly sterling figures.
“As the economy has come back, the [opportunities] to make huge profits have become fewer and further between,” Michael Banovac, managing partner of RMB Luxury Real Estate in Phoenix, told MONEY.
