Flipping houses went out of fashion around 2008, along with flip phones and sub-prime mortgages. But real estate data shows the practice is on the upswing — among million-dollar homes.
MarketWatch reports House flipping makes a comeback
Flipping tends to be most common in cities with a large supply of expensive homes. (To qualify as a flip, a home must be purchased and subsequently sold again within six months.) In fact, more than three-quarters of all high-end flipping took place in five markets: The New York metro area and Los Angeles, San Francisco, San Jose and San Diego.
What’s behind these quick turnarounds? “Flipping happens when prices are rising rapidly even if price levels are low,” says Jed Kolko, chief economist for real-estate firm Trulia.
It’s possible to double the value of a home, says Jeff Salgado, a San Francisco-based realtor. Investors could buy a dilapidated home for $1.2 million, invest $600,000 and sell it for $2.4 million, he says. “Our buying community is driven by the biotech and high tech sectors. These people are brilliant at what they do, but a good portion of them don’t know the difference between a screwdriver and a hammer.”
When asked to comment, Bernanke replied “It’s not a bubble, it’s bubblicious“. Well … not quite.
But signs of a bubble are all over the place. And just as in 2000 with the dotcom bust, and 2007 with the real estate bust, the Fed is 100% oblivious of massive bubbles now.
Alternatively, the Fed harbors a “We Just Don’t Care” attitude, hoping employment picks up before the stock market, corporate bond market, and housing bubbles burst.
Regardless, bubbles never end well (except for bank executives and corporate insiders who cash out stock options and sell every share on the way up).Don't forget to Like Freedom Outpost on Facebook and Twitter, and follow our friends at RepublicanLegion.com.