This time last year, house flipping was at its highest level in years. Prices were soaring and smart investors were snapping up the dwindling number of foreclosed properties left on the market in hot markets like California. This year, it’s a different story entirely — not necessarily better or worse, just different.
In fall 2013, housing experts were crying “bubble!” Fortunately, those experts were wrong. Housing prices, though still on the rise, have settled down to a normal pace, reassuring the American public that we are not approaching another housing disaster. On the down side, prices soared so high so quickly that the average American can no longer afford to go shopping for a new house. Salaries simply haven’t kept pace with the rest of the economy, and the old saying is proving true — a dollar can’t get you what it used to.
In terms of house flipping, the fall 2014 real estate market has limited opportunities for rehabbers who want to focus on low-end properties. There are still undervalued properties to be found throughout the state of California, particularly in lower income areas, but the pickings are getting slim. The real market for house flippers this fall is at the other end of the spectrum.
Sales of homes priced over $1 million are at a seven-year high in California. While overall sales are dwindling, sales of multi-million dollar homes are on the rise, particularly in wealthy markets like San Francisco, San Jose, Los Angeles, and San Diego. Investors who have the capital to flip homes in high end markets stand to make gross profits in excess of $250,000 per flip. The main obstacle to success is finding an appropriate loan. Fortunately for you, ZINC Financial offers loans of up to $800,000 to qualified clients.
If high end house flipping isn’t your style, the current market is also ideally suited to buy and hold investment strategies. Rent prices are on the rise, and according to BusinessWeek, housing market experts expect home prices to increase 6% from May of this year to May 2015, these same experts predict that prices will continue to rise through 2016. Thus, with the right property, buy and hold investors can make great returns both on the rent they collect monthly and on the final sale of their home.