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Published: 2/4/2014 - Updated: 2 months ago

Flipping homes gains popularity in local market

Quick investment sales up 32% from year before

BY CHIP TOWNS
BLADE BUSINESS WRITER

Flipping homes continued to be a growing trend in the Toledo area last year, according to statistics provided by RealtyTrac, a California real estate data firm.

The company defines a flip as anytime a home is purchased and then sold again within six months.

According to RealtyTrac, 193 houses were flipped in the four-county Toledo metropolitan area in 2013. That's up 32 percent from 2012 and up 89 percent from 2011.

The 193 flips represented 2.4 percent of all sales in the area. They peaked at 5 percent of all sales in the first quarter of 2013 and fell to 1.5 percent by the fourth quarter.

On average, flippers bought a house for $77,333 and sold it for $115,671. There is no solid data on how much time or money the average investor spent on repairs or improvements before selling it.

In the fourth quarter of 2013, the average price of homes being flipped increased. The average home was bought for $97,500 and sold for $126,429, according to RealtyTrac. That resulted in an average gross profit of $28,929, which was down from $33,374 in the fourth quarter of 2012.

One reason for the higher average purchase price may be that a lower percentage of the flipped houses are coming out of the foreclosure market. That is certainly the trend nationally.

“Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase,” said Daren Blomquist, vice president of RealtyTrac. “For the year 21 percent of all properties flipped were purchased out of foreclosure, but that is down from 27 percent in 2012 and 32 percent in 2011.

Nationally, there were 156,862 flipped homes in 2013, up 16 percent from 2012 and up 114 percent from 2011.

Homes flipped in 2013 accounted for 4.6 percent of all U.S. single-family home sales during the year.

The average gross profit for a home flip was $58,081 in 2013, up from $45,759 in 2012.

The segment with the biggest increase in 2013 was on homes with a flipped price of $400,000 or more — up 36 percent from 2012.

Investors are spending less time rehabbing homes. The average time to complete a flip nationwide was 84 days in 2013, down from 86 days in 2012 and 100 days in 2011.

Contact Chip Towns at ctowns@theblade.com or 419-724-6194.



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