Recent data on the California housing market confirms what many experts have suspected since the beginning of 2014: This year, the housing market is calming down, but home prices are still going up.
An article in the Los Angeles Times reports that home prices across Southern California were up 11.4% compared to the same month last year. However, home prices only increased 1.5% from the previous month. Additionally, home sales are down. The number of sales year-over-year dropped by 15.1% in May, showing quite definitively that the buying frenzy of 2013 has ended.
But that’s not necessarily bad news for house flippers.
Home sales are decreasing and home prices are leveling off, partially because many house flippers have exited the market. The number of foreclosed properties available in California has dwindled significantly, and people are much less willing to pay far above asking price because there are fewer buyers to compete with. There are, however, still plenty of buyers to compete with. One realtor told the LA Times that their clients are no longer having to compete with 20 other offers, just five or six. Those five or six offers are more than enough to keep prices on the rise, and sellers are more frequently than not getting more than their asking price.
Inventories are still low, buyers are still buying (less, but they’re still buying), and competition for the best properties is going down. For investors with solid sources of residential rehab financing, this means that there are still ample opportunities for fix and flip investment throughout California.
With foreclosures becoming scarcer, savvy house flippers are turning to the luxury market. Despite the reduced number of overall home sales, sales of homes priced over $1 million are actually at an all-time high. With the right house flipping loans to leverage their assets, investors with an eye on the luxury market — particularly in San Francisco and the surrounding areas — are making a killing in California.
Learn more about luxury house flipping and the loans needed to do it by calling the team at ZINC Financial at (559) 326-2509. We routinely fund loans in as little as seven business days and have a solid reputation of fostering mutually beneficial relationships with our clients. Learn more by calling now.