Wall Street has made a mountain of money available to house flippers, and selling move-in-ready rehabs has rarely been easier. The challenge is finding beat-up and out-of-date properties that can be renovated and resold for a profit.
“Investors like me, we’re like ants on a sugar hill all fighting for the same projects,” said Ed Stock, who started fixing and flipping houses on New York’s Long Island after the 2008 mortgage meltdown. “It’s the greatest time to be in this market; it’s just hard to find the inventory.”
Foreclosure moratoriums have shut off a big source of fixer-uppers since last spring’s lockdown. Meanwhile, competition is stiff from regular home buyers armed with superlow mortgage rates and inspired by cable-TV renovators. Rising costs and limited availability of labor and building materials, such as lumber, cut into profits and stretch out jobs.
Just 2.7% of home sales were flips—sales within a year of a prior sale—during the first quarter, according to property data firm Attom. That is the lowest portion of sales since at least 2000, when Attom started counting flips. The number of flipped houses and condos were the fewest in a quarter since 2003.