Ron Trujillo | Aug 21, 2019 | 0
Californians embrace home flipping
By Ron Trujilloemail@example.com
Californians were flippin’ crazy in 2016.
Buying, fixing up and selling homes has become a favorite pastime for many Californians looking to turn hard work into a hefty payday. And many are overlooking the financial risks and focused only on the potential reward.
Fresno, one of the most affordable housing markets in the state, had the nation’s fourth-largest percentage of flipped homes in 2016. Flipped homes – properties owned less than a year – accounted for 8.2% of home sales last year, the highest percentage in California. It’s a head-turning percentage but much lower than the city’s record of 9.5% in 2013.
Los Angeles had the second-largest percentage of flipped home sales at 7.3% in the state, and in the top 20 nationwide, according to a recently released Trulia report. Flipped homes accounted for a record 10% of home sales in the city in 2016.
Bakersfield, the most affordable major metropolitan market in the state, had the third-largest percentage of flipped homes in the state at 6.7% in 2016. It was the most flipped homes in the city since 2005.
How several other California metros fared:
- Riverside-San Bernardino: 6.4%
- Sacramento: 6.3%
- San Diego: 6.1%
- Oakland: 5.3%
- San Jose: 5.2%
Las Vegas had the largest percentage of flipped homes in the nation at 10.5% in 2016, followed by second-place Daytona Beach, Fla., at 9.0%.
Featured photo by Africa Studio/Shutterstock
Lowest cap rates for rentals in Golden State
California has been a dream market for homeowners, but a nightmare for investors.
The Golden State’s high prices generate paltry cap rates, the key to making money in residential real estate.
In fact, five of the nation’s worst investment markets are in California, and seven of the 10 worst, according to HomeUnion.
San Francisco and San Jose had cap rates of 2.8%, the lowest in the nation, followed by Orange County at 3.0%. Los Angeles, San Diego, Sacramento and Oakland all had cap rates of less than 4.2%.
Midwest markets were much better investments for landlords, with cap rates of 8%-plus and the highest price of $121,700 in Richmond, Va. – about one-fourth the median-home price in California.
Photo by Cash Rrraum/Shutterstock