A decade after the U.S. housing bubble burst, filling the real estate market with cheap real estate, house flipping is on the rise again.
Now that the real estate market has stabilized, flippers can’t ride the bubble or scoop up foreclosed properties as cheaply as they did before. Now they have to look beyond pure profit to add real value to the refurbished properties.
According to Steve Swidler, the KPMG professor of business and finance at Lafayette College, that’s not necessarily a bad thing. A nationally quoted authority on the economics of house flipping, Swidler says the practice has given new life to housing markets and rehabilitated neighborhoods.
Flipping could be seen as a social benefit because it’s bringing houses up to standards and putting them back on the market.
The downside of flipping is that it can drive up already-rising housing prices and put price points beyond the affordability for some buyers. It’s all about location, location, location, Swidler says.
Flipping, generally defined as reselling a house within a year of purchase, has been the subject of DIY television shows and workshops that help real estate novices learn how to make money on blighted or vacant properties.
Contact: Steve Swidler, 610-330-5303, firstname.lastname@example.org