A flipped home on the market in Petworth.
A professional DC real investor says the city’s prime flipping days are over. Justin Pierce, a contributor to The Washington Post, wrote Wednesday that if you’re interested in flipping homes in the District, “you’ve probably already missed the window.”
Pierce — who, readers should keep in mind, has a vested interest in a less-competitive flipping market — argues that the ideal time to buy homes to flip them is when no one else wants to touch properties, such as when the market was depressed in 2008. That’s not the case in DC right now, where population is rising, home supply can’t keep up with demand and prices are steadily increasing. Using the example of Fairfax County, he points out that both home values and interest rates are going up while incomes are static. That means homes are becoming less affordable. We’ve previously written about DC’s rising home payments, which have gone up 24 percent in the last year alone.
In the article, Pierce predicts the following:
…Interest rates will rise and the market will level off and possibly even stagnate for a while. Real estate is not all mathematics. If people can’t get what they want for their home they will just stay put. You, as a real estate flipper, cannot. That flip home is like a huge weight around your neck. You have to get rid of it as soon as possible. In a rising interest rates scenario like this you’d have to make your home the absolute cheapest in the neighborhood to get it moved. The market may not drop 11 percent but you may have to.
He notes that he’s still flipping homes, but says finding the right properties to flip is getting more difficult.
In July 2013, the Post reported that flipping seemed at or near a peak in the DC region. At the time, Daren Blomquist, the vice president of RealtyTrac, warned of a coming slowdown.
“We’ll see the numbers taper back off. There’s a perfect storm for flipping right now. You’re really seeing a market that’s evolving from a distressed market to a recovering market so that’s a great window of opportunity for flippers. But once that window is gone and home prices normalize and the distressed properties have also normalized to a low level, then the volumes will go back down.”
What are you seeing on the market, investors? Let us know in the comments.
See other articles related to: flipping
This article originally published at http://dc.urbanturf.com/articles/blog/dcs_house-flipping_salad_days_are_over_investor_says/8368
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