Who says flipping is dead?

Since the first of the year, flippers who follow the soaring price increases in the hottest California and Southwestern markets have been doing very well indeed.

Now it’s clear that those who operate in the high end of the market in the hot spots, where both risk and reward are highest, have been returning profits that put plodding buy-and-hold types to shame.

The latest data from RealtyTrac out today shows flipping as a whole (where a home is purchased and subsequently sold again within six months) was down 35 percent from in the third quarter— in the third quarter of 2013, and down 13 percent from the third quarter of 2012.

Yet investors made an average gross profit of $54,927 on single family home flips in the third quarter. That was up 12 percent from an average gross return of $48,893 in the third quarter of 2012.

The reason is a lot more folks are flipping at the high end by buying and selling homes for $750,000 or more. A total of 968 high-end homes nationwide were flipped in the third quarter, up 34 percent from a year ago. More than three-fourths of all high-end flips were in just five markets: the New York metro area and four coastal California markets — Los Angeles, San Francisco, San Jose and San Diego.

Super High-End Flipping

Super high end flipping is even hotter. Flips on super homes priced between $1 million and $2 million increased 42 percent year over year, while flips on homes priced between $2 million and $5 million increased 350 percent year over year. The luxury market is strong. A recent study by the Luxury Institute for Coldwell Banker Previews International found that, …read more