According
to a report at attomdata.com, home flipping in 2017 was at an 11 year high.
From the report:
“207,088 U.S. single family homes and condos were flipped in 2017, up 1 percent from the 204,167 home flips in 2016 to the highest level since 2006 — an 11-year high.”
Plus, Memphis leads the nation in the rate of flipping, with the Memphis zip code of 38116 (otherwise known as the Whitehaven neighborhood) leading the pack. Over 31% of all home sales in that zip code were flips in 2017.
I can tell you from personal experience here in Memphis that prices are increasing as there are multiple bidders for every single property. To me, It is beginning to look a lot like 2006/2007. Back then, I basically had to sit on the sidelines and watch as I continuously got over and outbid by folks willing to take a 1% cap rate. Lots of things did not make sense back them and they are beginning not to again.
My advice, stick to your numbers folks. Numbers do not lie. If the numbers make sense then buy. If not, pass. Do not get caught up in the exuberance and do not make a deal just because you have not made one in a while. The market will clear eventually. Don’t get caught on the wrong side of that clearing. I picked up a lot of decent properties in 2009 and 2010 after the last crash. Seems like I may get to do that again in the not so distant future.
