I’ve been reading about an interesting phenomenon in the local (Metro Detroit) housing market. There is currently both a buyers market and a sellers market happening simultaneously. I would expect that this is happening in many areas around the country as the real estate market recovers.
A sellers market is defined as having less than three months of available inventory for sale. A buyers market is having more than that.
What’s happening is that buyers are looking for move-in ready homes. Those homes are being snatched up quickly, and are even back to the days of receiving multiple offers, some above asking price. There is currently only a one and a half month supply of these types of homes in our area, making it a definite sellers market if your home is well kept and move in ready.
Distressed homes, on the other hand, are still in big supply. Foreclosed properties that need work. Owner occupied homes that have been seen regular maintenance and upkeep fall by the wayside. Those homes are still readily available.
Meaning that buyers have the option of buying a home and putting work into it….but right now, they don’t want to.
I wonder if this means that the days of house flipping are on the horizon once again.
If a flipper can start buying those homes that people don’t want, putting money into them, then logic would say that they’d then enter the sellers market. Provided they can get the house at a reasonable cost and perform renovations so that their total cost is lower than what they get, I would think you might see flippers back in earnest.
Some of my favorite reality TV revolved around house flipping prior to the crash. My favorite show in that genre was Property Ladder, where a crew would follow a flipper, usually a novice, from the time where they outlined their plans and their budget, to the time where the flip was complete, showing the various progress along the way. There were inevitably delays and budget overruns. In many cases, the flips were successful and they made out, but in other cases, their overruns forced them to sell at a loss, or forced them to hold onto the property for a lot longer than they had planned.
I’m sure a lot of it was staged, but it made for great TV! And, I hope that the current market re-opens that door once again.
Are you seeing the buyer/seller market condition in your area? Would you consider undertaking a flip to bring a home into the sellers market?