Home flipping returns to Michigan's real estate markets
House flippers in Michigan are having a tough time making money these days.
Before the recession, house flipping was a small, but very active part of Michigan’s real estate industry.
House flipping is where a person buys a home and quickly puts it back on the market, hoping to make a profit on the sale. Many homes resell within six months. Flipping flopped during the recession as plunging home prices took the profit away.
But a large stock of foreclosed homes and rising home prices has once again spurred interest in flipping in Michigan.
Daren Bloomquist is with Realty Trac. He says the average flipped home in Michigan brought in about $17,000 during the third quarter this year.
“In comparison, nationwide (the average profit on a flipped home is) about $55,000, so Michigan is definitely below that,” says Bloomquist.
Michigan trails far behind California, where the average profit from a flipped home is more than $100,000. But in Georgia, the average flipped home lost about $4,000 in the third quarter.
Despite the growing profit margin in Michigan, Bloomquist says Michigan flippers are finding it hard to buy homes cheap enough these days to make a profitable flip.
“So it’s certainly a proposition that is not for the faint of heart,” says Bloomquist.
Nationally, home flipping started regaining momentum in 2011, but it appears to have stalled in many markets around the country.