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Home flip sales dip, but financing increases

Home flip sales dip, but financing increases

By Ron Trujillo/ron@calhomenews.com

Has home-flipping peaked or just taking a breather? Well, it depends on how you look at the numbers.

Home-flipping financing increased nationwide to the highest level in nine years during the first quarter, according to a closely watched ATTOM Data Solutions report. But home-flip sales dropped to a two-year low.

The report found 43,615 single-family homes and condos were flipped — sold in an arms-length transfer for the second time within a 12-month period — nationwide in the first quarter, down 8% from the previous quarter and off 6% from a year ago.

However, home flipping accounted for more home sales overall nationwide during the first three months of the year. An impressive 6.7% of sales were flips, compared to 5.8% in first-quarter 2016 and unchanged from a year ago.

One-third of all homes flipped during the first quarter were purchased by the flipper with financing, compared to 31.9% in the fourth quarter and 29.5% a year ago. It’s the highest percentage of flipped homes with financing since third-quarter 2008, when almost 38% of flips were financed.

 “The business of financing for home flippers continued to grow in the first quarter … even as the home flipping rate plateaued compared to a year ago and average home-flipping returns decreased for the second-consecutive quarter,” says Daren Blomquist, senior vice president of ATTOM Data Solutions.

Colorado Springs, Colo., had the most financed home flips at almost 70%, followed by Denver, Seattle and Boston, all above 50%.

San Diego had the largest percentage of financed flipped homes at 46% in California, followed by San Francisco at 43%.

Los Angeles remains a flipping crazy market, with flips accounting for 27.8% of home sales during the first quarter. But if you’re looking for the best return on investment? Barstow and Ridgecrest, where flippers doubled their dollars.

You can check out how dozens of ZIP codes fared on the ATTOM website.

Feature photo by Stock Asso/Shutterstock. San Diego photo by William Garrett/Flick.

Buy or rent? Depends on where you live

Fast-rising home prices are great for homeowners, but tough for those looking to purchase a piece – perhaps a sliver is a better reference – of the California Dream.

Four of the eight cities with the longest period where buying makes the most sense are in California.

Buying in San Jose? You better stay at least 5.1 years for the investment to pay off, the longest period in the nation, according to the Zillow Breakeven Horizon report.

San Francisco is in second place at 4.9 years, followed by Los Angeles at 4.7 years. San Diego is No.5 nationwide at 4.5 years.

The U.S. average where buying makes more sense than renting is about two years. And there are many California cities that meet the two-year horizon.

Zillow’s Breakeven Horizon report assumes a 20% down payment, a 30-year fixed-rate mortgage at the current interest rate for people with credit ratings between 680 and 740, property taxes, homeowner’s insurance, 3% purchase costs and 8% selling costs. The report also includes annual maintenance costs equal to 1% of the home’s value.

Check out the interactive map to determine if you should buy or rent.

Photo by Romolo Tavani/Shutterstock.

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