Friday, January 12, 2007By LESLIE BERKMANThe Press-EnterpriseSpeculation by investors who buy houses hoping to profit by quickly reselling them declined last year statewide and in Inland Southern California. The practice commonly called "flipping" was more active in Riverside and San Bernardino counties than most of the state.An online consumer-information service released data Thursday showing that flipping fell as double-digit home appreciation disappeared, home sales slowed and chances dimmed for an instant turnaround profit.HomeSmartReports.com said homes owned for six months or less accounted for 3.2 percent of all resales in California last year. That was a drop from a peak of 4.5 percent during the home-speculation frenzy of 2005.In California, flipping activity last year was highest in Kern, Yuba and Riverside counties.Quick-turnover transactions represented 4.3 percent of the resale market in Riverside County in 2006 and 5.6 percent in 2005; San Bernardino County was 3.7 percent in 2006, down from 4.4 percent in 2005.The California community with the greatest amount of flipping as a percentage of sales was Corona at 12.9 percent. San Jacinto came in third at 12.2 percent, trailing Playa Vista at 12.3 percent.Statewide, HomeSmart said almost a quarter of last year's flip sales resulted in a loss for the seller, the highest percentage since 2002. Overall, flippers sold the homes for a median $45,000 more than they paid, compared with $52,000 in 2005. The figures do not include fix-up costs and allow for a 5 percent sales cost, said HomeSmart president Mike Ela."There are still opportunities out there, but the margins are getting slimmer," Ela said. "It is more of a buyer's market now."Bruce Norris, president of The Norris Group, a Riverside-based real estate investment company, said flipping homes for profit is much riskier now than a year ago and requires more knowledge and research."You have to buy at a greater discount to make sure you realize a profit," Norris said.He predicted that over the next five years, more of the prime properties for flipping will be lender-owned properties in foreclosure, as households who bought homes with adjustable-rate mortgages can no longer afford their mortgage payments. Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula
