Profits from home flipping hit a ten-year high in 2015, and activity rose above a peak set in 2005, according to a new report from RealtyTrac. Bobbi Rebell reports.
New concerns about the U.S. housing market after a report shows home flipping is on the rise in many parts of the country. According to RealtyTrac, flipping in 12 metropolitan areas last year surpassed the peak set in 2005. The concern is that flipping can artificially increase prices and make homes less affordable for buyers. The report defines a home flip as any transaction that occurred on the same property twice within 12 months. Profits generated by home flipping also hit a ten-year high, topping more $100,000 in expensive markets like New York, and Los Angeles. The data also showed more small investors getting in on the action. That raises concerns about whether a housing bubble, like the one a decade ago, is becoming a risk. But the the vast majority - seventy percent - of the 2015 flippers used their own money. RealtyTrac's Daren Blomquist: (SOUNDBITE) DAREN BLOMQUIST, SENIOR VICE PRESIDENT OF COMMUNICATIONS, REALTYTRAC (ENGLISH) SAYING: "By comparison, if we look back to 2005 during the housing bubble, it was only thirty percent. It was less than half of that who were using cash to buy these flips, and that's why we got into trouble. It was too easy for these flippers to get access to other people's money." In other words, today's flippers have more skin in the game and are less leveraged. A sign, says Blomquist, of confidence in the market.