Most South Florida residents are probably familiar with the investment technique known as “flipping.” These types of real estate transactions involve a prospective buyer looking to purchase a property for a lower-than-average price, with the buyer then fixing up the property and selling it for a profit. This type of arrangement was very popular throughout many different real estate markets before the housing bubble “burst” several years ago, and since some areas have rebounded in recent years interest has regenerated in certain areas. However, according to a recent article, South Florida has been seeing fewer “flippers” as property values in the local area have increased.
The article noted that for the three month period from July through September of this year, the number of “flips” decreased by about 8 percent. The decrease was seen in properties throughout Palm Beach County, Miami-Dade County and Broward County.
There is a big difference in searching out property as an investor and doing so with an eye toward home ownership. Investors will often look for distressed or foreclosed properties that they believe can be quickly and cheaply fixed up and sold for a profit. First-time homebuyers or families are usually looking for something that is more on the “move-in ready” side of the market, requiring less work prior to taking up residence.
As the residential real estate market in South Florida stabilizes, there may be more of an opening for buyers looking for a permanent residence as investors look elsewhere for property they can buy on the cheap. It just goes to show that in a real estate sale it is important to know what the buyer wants out of the property in question.
Source: Sun Sentinel, “Home flipping falls as South Florida prices rise,” Paul Owers, Oct. 17, 2013