For immediate release – January 11, 2007
Drop in California flipping activity
San Juan Capistrano, CA---- The "flipping" of homes in California
last year declined to its lowest level since 2003 as speculators pulled
back from a real estate market where home values have largely leveled
off, and chances for quick turnaround and profit are receding, a
consumer website reported.
Homes owned for six months or less accounted for 3.2 percent of
all home resales in 2006, down from 4.2 percent in 2005 and 3.6 percent
in 2004. In 2003 it was 2.4 percent, according to
www.HomeSmartReports.com .
Flipping activity was highest in Kern and Riverside counties last
year, lowest in Napa County and in rural Sierra foothill counties (see
chart).
Communities with the highest 2006 rates in 2006 were Corona (zip
92880 with 12.9 percent), Playa Vista (zip 90094 with 12.3 percent) and
San Jacinto (zip 92582 with 12.2 percent).
"Speculative buying and selling of homes contributes to market
volatility and risk, all part of that 'bubble' theory people were
talking about. Lending institutions measure risk and volatility,
homeowners and buyers would also do well to keep an eye on them in
addition to watching the ups and downs of their local prices and
sales," said Mike Ela, HomeSmartReports.com president.
Consumer-oriented HomeSmartReports.com provides homeowners and
potential homeowners with online access to sales trends, local market
risk factors and property value estimates. The website is also the
first to provide consumers with more technical information that until
now has only been available to real estate industry professionals.
When factoring in commissions and costs, 24.9 percent of the last
year's "flip" sales resulted in a loss for the seller, the highest
percentage since 25.2 percent during 2002. Overall, flippers sold the
homes for a median $45,000 more than they paid, somewhat lower than
$52,000 in 2005. If there were improvement costs, profit would be
correspondingly lower.
(Chart)
2003 2004 2005 2006
Los Angeles 2.5% 3.9% 4.4% 3.6%
Orange 2.3% 3.7% 3.2% 2.5%
San Diego 2.3% 3.5% 2.8% 2.5%
Riverside 2.7% 4.6% 5.6% 4.3%
San Bernardino 2.5% 4.0% 4.4% 3.7%
Ventura 2.1% 3.0% 2.9% 2.5%
SoCal 2.5% 3.9% 4.1% 3.4%
San Francisco 1.8% 3.4% 3.7% 2.9%
Alameda 1.8% 2.6% 3.2% 2.5%
Contra Costa 1.8% 3.0% 3.7% 2.6%
Santa Clara 2.1% 2.9% 4.0% 3.3%
San Mateo 1.6% 2.4% 2.9% 2.3%
Marin 2.3% 2.8% 3.3% 2.5%
Solano 2.5% 3.5% 3.8% 3.0%
Sonoma 1.4% 2.2% 2.6% 2.0%
Napa 2.1% 2.3% 3.0% 1.9%
Bay Area 1.9% 2.8% 3.5% 2.7%
Santa Cruz 1.5% 1.6% 2.9% 2.2%
Santa Barbara 2.3% 2.5% 3.0% 1.4%
San Luis Obispo 2.7% 3.0% 3.1% 3.4%
Monterey 1.4% 2.0% 2.6% 2.0%
Coast 2.0% 2.3% 2.9% 2.2%
Sacramento 2.8% 4.4% 5.3% 2.8%
San Joaquin 2.3% 4.1% 5.6% 2.5%
Placer 2.5% 3.5% 5.1% 2.1%
Kern 3.3% 4.4% 6.2% 4.7%
Fresno 3.2% 4.5% 5.5% 3.7%
Madera 2.3% 2.5% 4.5% 4.0%
Merced 2.9% 3.8% 5.9% 3.2%
Tulare 2.5% 3.5% 4.9% 3.2%
Yolo 1.8% 3.2% 4.6% 2.7%
El Dorado 1.7% 3.2% 3.9% 2.3%
Stanislaus 2.2% 3.9% 5.7% 3.5%
Kings 1.9% 3.9% 4.9% 3.1%
San Benito 0.5% 1.7% 3.3% 2.8%
Yuba 3.3% 3.9% 6.5% 5.5%
Colusa 1.4% 2.0% 4.7% 1.1%
Sutter 2.5% 3.3% 4.0% 2.2%
Central Valley 2.7% 4.1% 5.4% 3.3%
Sierra Foothills 1.6% 2.0% 2.1% 2.0%
Northern Calif. 2.1% 2.7% 3.1% 2.2%
Statewide 2.4% 3.6% 4.2% 3.2%
-30-
Source: www.HomeSmartReports.com
Indices for other MSAs available
Media calls: Mike Ela or Steve Morgan (949) 481-6801
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