RealtyTrac: profits for Nevada home flippers getting slim

LAS VEGAS -- Outside of Washington, D.C., Nevada in the second quarter of 2014 led the nation in the percentage of residential sales classified as flipped homes but that percentage is slipping and so are the gross profits resulting from such flips, according to data released by RealtyTrac Thursday night.

RealtyTrac reported that 8.1 percent of residential sales in Nevada from April through June involved homes that had been purchased and subsequently resold within 12 months. That was exceeded only by the 10.2 percent share in the nation's capital, the real estate analytics company from Irvine, Calif., reported.

Nevada's share of sales that involved flipped homes dropped from 9.1 percent in the second quarter of 2013. That was consistent with the national trend, with flipping in the United States hitting a two-year low.

Gross profits from flipping are also on the decline nationally, but more so in Nevada. Flippers statewide earned a mere 4.8 percent gross profit on flips based on home purchases that averaged $195,649 and sales that averaged $204,952, RealtyTrac reported. That was the lowest profit margin among 30 states whose data was available.

Nevada profit margins contrasted sharply with 2012, when RealtyTrac reported that Las Vegas flippers averaged 53 percent in gross profit based on gains of $70,747 per home.

"Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013," RealtyTrac vice president Daren Blomquist said. "Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to."

 


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