Flipping is flopping in Cali

Posted by: Dean Foust on August 29, 2006

Interesting article on Inman News (read it quick; articles are free for a day or so but then available only to paying subscribers) about how flipping has turned into a dangerous game in California. The real story is in the accompanying table, where it shows the median gain — or loss — suffered by flippers in various counties. Look at Marin County, where median loss was $86,000. Wow! I’m sure that’s off a small sample, but that’s still real losses. For the life of me, I can’t fathom why anyone is still trying to flip at this late hour. I also suspect there are going to be a lot of flippers who end up renting out their homes.

Reader Comments

mike

August 29, 2006 7:22 PM

do you really think they'll try to rent out their properties, and take a loss every month for the indefinite future, or just cut their losses and get out at whatever price they can get? i would guess the latter. it's got to be hard to eat a few thousand dollars every month.

any flipper who bought in the last year can in no way expect to rent out their properties for enough to cover all of the monthly expenses, especially after their mortgage's teaser rate expires. i am expecting to see a lot of short sales.

Mike Reardon

August 30, 2006 2:13 AM

Marin was always a high end property, for the last thirty years working into that high a ceiling was always in question in the Bay Area. Very risky, in an overall market that is up more than 300% over the last five years, and Marin was still a high end property, at one point last year it reached only 7% affordability for the Bay Area population. One point on Bay Area markets, over the last five years successful Bay Area Asians, and there family money, that is parents buying children and relative into this market, have transformed communities and helped to hold many prices above market level. That Asians family money has been a clear percentage plus for Bay Area markets, for about the same thirty years.

CrucialTaunt

September 13, 2006 2:55 PM

Check out this somewhat hilarious blog on flippers in Orange County (specifically, Irvine):

http://ocfliptrack.blogspot.com/

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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