Home flipping, a trend of Las Vegas’ housing bubble, became more popular and a lot more lucrative last year amid surging prices.
The fast buy-and-sell real estate deals consists of 7.2 percent of all single-family home sales in the Las Vegas area last year, up from 6.3 percent in 2012, via to a new report from RealtyTrac.
The research firm defines flipping as buying a house and then selling it within six months.
Local property owners booked an average gross profit of $44,501 on last year’s flips, more than double what they earned in 2012, $20,872.
Gross profits are the sales price over the purchase price and do not account for costs the flipper may have acummulated after buying the home, such as renovation work.
Nationwide, flipping comprised 4.6 percent of SFR home sales last year, up from 4.2 percent in 2012, RealtyTrac found. U.S. flippers booked gross profits of $58,081 per deal in 2013, up 27 percent from $45,759 in 2012.
Flipping was crazy fast during Las Vegas’ doomed housing boom last decade, when investors with no real estate expertise — but received easy obtained loans — bought property and sold it for profit a short time later.
This caused prices to high rise, as two-story homes that today sell for $100,000 sold for around $200K or more seven or eight years ago.
Prices plunged during the recession but now are rising at one of the fastest rates nationally again, thanks to investors who have bought cheap homes in bulk the past few years to turn into rentals.
The surge has created new opportunities for flipping.
The median sales price of previously owned single-family homes in Southern Nevada in December was $185,000, a major increase of 24% according to the Greater Las Vegas Association of Realtors.