SoCal house-flipping roaring back
July 29, 2013
Signaling a potential statewide housing sector recovery, the practice of flipping houses in Southern California has suddenly reached near-record levels, matching the 2005 high. (Los Angeles Times)
Flipping of residential units at the peak of the busing bubble was in retrospect a warning sign that problems were on the immediate horizon.
But real estate experts contend there is a major difference in the housing activity of today, in that low- or no-interest mortgage loans are not part of the equation: most speculative home purchases are being made with purchasers’ cash.
That means that no financial institution is at risk, as was the case when the housing market imploded five years ago. Instead, it my be a sign of a healthy economic recovery.
Median prices in many Southern California areas have been increasing by 20 percent monthly this year.
“No matter how you look at it, flipping levels are high in a historical context,” said DataQuick spokesman Andrew LePage. “If the rate shot up from here, then I think that does become a warning sign.”
San Diego has been experiencing near-record sales as speculators flip houses at the highest rate in decades.