Flipping Homes Slows in Las Vegas
Flipping homes has slowed in Las Vegas, declining to 7.7% of single family home sales in Nevada in the third quarter, according to RealtyTrac. Flipping slowed to its normal historic level last quarter.
During the boom, thousands of investors brought in huge profits from flipping homes in Las Vegas, which has even seen a cable television show produced for a national audience as a result. Flipping Las Vegas is an A&E reality series, which profiles a couple working together with a team of laborers purchasing and flipping homes in Sin City.
RealtyTrac, which is an Irvine, Calif. based foreclosure data firm, defines flipping as selling a home within 12 months of a purchase. Flippers are credited with helping to trigger the real estate collapse by artificially inflating home prices for re-sale buyers. Investors flocked to Las Vegas to buy cheap homes during the housing boom in bulk and transformed many of them into flips they later put on the market for higher prices.
The flips helped trigger the real estate collapse with a load full of mortgage money that was freely lent by banks and other mortgage lenders with few controls during the boom. The crisis helped to send the Las Vegas economy into a tailspin, which has seen major improvements since the financial crisis. The market saw a spike in flips in the last two years, but lately many investors have cooled their heals to purchase homes to flip.
Homes listed for sale are increasing even as the volume of properties typically cools moving into the holiday season. There were 8,952 single family homes listed for sale as of Nov. 21st, a jump from about 8,000 this past summer, according to the Greater Las Vegas Association of Realtors. The sales volume dropped during October and home values aren’t rising as rapidly as they were in the past year.
The median price of a home leaped 29% during 2012, but cooled to 12.5% earlier this year. Slower pricing appreciation likely spells a stronger future for the Las Vegas housing market, which had struggled to recover after it led the nation in foreclosures for five straight years.
The number of home sales are likely to increase moving into the spring and summer seasons, which typically see more home buyers out shopping for new homes. Las Vegas was the destination for many flippers during the housing heyday, who cashed out big profits as a result.
The man calling the shots for Flipping Las Vegas, investor Scott Yancey picks up properties on the cheap, but the show rarely discloses what the final sales price for the properties are or how much Yancey actually makes off the deals flipping homes.