House Price Rebound Cruising for a Fall

House Prices

House Price Rebound Cruising for a Fall

Beware US real estate flippers that could cause recovery to flop

When flipping property is a big topic of conversation, we should have learnt by now to be nervous that a housing market is cruising for a fall.

The new flippers of US housing are not the individual speculators of the boom years, who boasted of making tens of thousands of dollars for a few weeks “work”, and they wouldn’t call their plans anything so gauche.

These investors, who have poured into the US housing market since its nadir, are hedge funds and private equity vehicles, and recently (belatedly) individual entrepreneurs. They may be planning to hold the property for a while and harvest rental income in the interim, but decent returns are predicated on a sale, and usually a quick one.

That makes them flippers – and it means that the recent run of strong housing market data may be more chimeric than real.

More here…


2 Responses to “House Price Rebound Cruising for a Fall”
  1. neidermeyer says:

    The return of house flipper shows on TV is a huge red flag.

  2. talktotennessee says:

    Absolutely, these new entrepenuer investors are selling package deals. Remodeling these houses bought for 30-50 cents on the dollar and selling them globally as a package with rental management. Hiring appraisers to come in an use comps off of comps to escalate values and boost the prices. In some cases flipping them between parties and LLCs to hike prices. Same old song, second verse. Nothing changes and yes, these will crash too when the renters tear them up and investors are tagged for repairs. Some of them fail to rent now because in stressed areas. It is a nightmare returned waiting to happen.

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