Morning Briefing: Home flipping higher than 2005 peak in 12 markets

by Steve Randall03 Mar 2016
Home flipping higher than 2005 peak in 12 markets
Home flipping has increased to above the levels of the 2005 peak in a dozen US housing markets. RealtyTrac has published a report Thursday which shows that 179,778 U.S. single family homes and condos were flipped in 2015, 5.5 percent of all sales of those property types.

Counter to the national trend, the share of homes flipped in 2015 was above 2005 levels in 12 of the 110 metro areas analyzed in the report, including Pittsburgh (19 per cent above 2005 levels); Memphis (18 per cent); Buffalo, New York (12 percent); San Diego, Seattle and Birmingham, Alabama (4 per cent); and Cleveland (3 per cent).

“When home flipping numbers go up, it is usually an indication that the housing market is in trouble,” said Matthew Gardner, chief economist at Windermere Real Estate, Seattle, “The problem with a rise in home flipping is that these sales artificially inflate home prices, making housing even less affordable for buyers and increasing the risk of a bubble.”

The market with the sharpest rise in home flipping was Boise, Idaho where levels were 85 per cent higher than in 2015.
 
This is the best time to sell a home quickly
Sellers looking for the fastest possible sale in the spring season should go for May 1 to 15. That’s according to new research from Zillow which found that homes listed in that two-week period sell an average 18.5 per cent faster and for a price of around 1 per cent more.

The key is waiting until inventory falls later in the season: "The housing market today is heavily influenced by low inventory," said Zillow chief economist Dr. Svenja Gudell. "Faced with increasingly competitive markets, many buyers are forced to consider several homes and make multiple offers, elongating the home shopping experience. By listing homes further into the shopping season, sellers may attract buyers who are increasingly eager to purchase and may be more willing to pay a premium for the home."

However, as usual there are regional variations. In LA, San Francisco and Boston it’s beneficial for sellers to wait even longer, until May 16 to 31. Sellers in San Diego and St. Louis should list earlier though, around March 16 to 31 for a quicker sale and a premium price.
 
Mortgage applications drop as refi loans slip back
The share of refinancing mortgages fell to their lowest since January and the overall number of new home loans dropped last week. Data from the Mortgage Bankers’ Association showed a 4.8 per cent drop in its Mortgage Market Survey on a seasonally-adjusted basis.

On an unadjusted basis, the Index increased 7 per cent; the Refinance Index decreased 7 per cent; the seasonally adjusted Purchase Index decreased 1 per cent; the unadjusted Purchase Index increased 14 per cent compared with the previous week and was 27 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 58.6 per cent of total applications, from 61.0 percent the previous week; ARM share decreased to 5.6 per cent; FHA share remained unchanged at 12.0 per cent; VA share decreased to 12.1 per cent from 13.0 per cent; USDA share remained unchanged from 0.7 percent the week prior.

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