House flipping is at a nine-year high! While that may seem like good news, it actually foretells major problems in the housing market – a market we all can see is in a gigantic bubble right now.
Generally speaking, an uptick in home flipping activity could indicate that conditions in the housing market are worsening and home flipping is at a nine-year high. Just over 49,000 single-family homes and condos were flipped in the first quarter of 2019, according to a report released this week by real-estate data firm Attom Data Solutions. These homes comprised 7.2% of all home sales nationwide during that time period, representing the highest home-flipping rate since the first quarter of 2010, and that isn’t a good sign for the housing market.
Todd Teta, Attom’s chief product officer, explained that the number of homes that were flipped was actually down 8% from the previous year to a three-year low and the number of investors engaging in home flipping has dropped 11% over the past year. All of that signals a market slowdown and brewing troubles in the housing sector as a whole.
In the first quarter, homes flipped sold for a median price of $215,000. With the median purchase price standing at $155,000, the gross flipping profit was just $60,000, down $8,000 from a year earlier to a three-year low. –Market Watch
That means home flippers are making less money than previously. “While the home flipping rate is increasing, gross profits and ROI are starting to weaken,” Teta said in the report. “If investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more.” Think of it as selling off now before the market tanks.
Researchers have previously described home-flipping activity as a “canary in the coal mine” that could predict a cooling housing market, and a cooling market could lead to an all-out crash similar to the one we experienced during the Great Recession. Often these market crashes are spurred on by sub-prime loans, and homeowners purchasing more house than they can realistically afford.
The best way to prepare for a market crash is to get your own finances in order. The less money you owe to anyone else, the better off you’ll be. Your house won’t be foreclosed on if you own it (so long as you pay your rent to the government; aka, property taxes). All debts should be paid down, and now is not the time to take on more. If you need help getting started, consider signing up for emails from Future Money Trends. In those emails is great advice on building wealth and creating a bulletproof level of personal wealth. I have also met several people who have had success following Dave Ramsey’s plan, “the baby steps,” which he details in his book The Total Money Makeover. This is a great plan for those looking for a “Biblical approach” to money.
Oftentimes preparing for an economic disaster is the most difficult because of the time involved. It often takes several months to pay off debts and save an emergency fund, which is why we suggest preparing now. This debt-based system will crash, it is a matter of WHEN not IF. Hopefully, we still have 7-8 years until a complete collapse occurs, but we may not. No one knows when it will come crumbling down, only that it is unstable and unsustainable.
Mac, thanks for reminding folks that DEBT is the 4-letter word that will ruin your life if you give it a chance. Even necessary DEBT to buy a home should be approached very carefully. I think your admonition that, generally, the housing market shows signs of tanking, is observably wise.
I tell ya the Silver market is being destroyed pricewise. The Silver to Gold Price Ratio is now over at 90.63 :1 Like WTF?
Gold skies up, Silver drags. Gold goes down and Silver is hammered. Silver can’t win under this corruption. This is not a free trading market. The brakes are on full press on Silver going anywhere. Or when the controllers collected all the physical silver stash they can fill their vaults with, then decide to let it springboard up after they control all the physical metals.
Soooo …. this article is saying that housing sales are down.
And if the number of flips are down , the percentage rate out of the whole is up.
Ya gotta luv the bean counters .
House flipping down, Bird flipping UP!
Flip a bird for Pelosi, Chuckie Shummer, Kamala, Bozo O’Dork, AOC, Bernie, and Uncle Slow Joe Biden! Plus all the rest in the Clown car.
You can get plenty of money saving ideas right here on this site.
Buying in bulk is almost always less expensive.
Learning how to preserve food helps you to prevent waste.
Living off grid saves on utility costs.
Planting and harvesting some or all of your own food is less expensive than buying processed food from the store. And because homegrown, home cooked food is absent hidden chemicals, you can avoid costly medical expenses.
Just by owning a medical kit and studying basic first aid, you can skip an unnecessary emergency visit to the E.R.
Preparing for an economic collapse may appear to be paranoid on the surface, but it is a realistic way to avoid personal bankruptcy if you have:
a sudden unexpected catastrophe, loss of a loved one or a partner,
loss of employment,
or an expensive health challenge.
Good advice Honeypot.
I’m not paranoid, I know for a fact everything is “out to get” me,
that doesn’t mean I’m irrational about it, you’d never pick me out of a crowd, or give me a second look.
I’ll just make a short comment about going “off grid”.
When I say “off grid”, I mean freedom from any government
provided or regulated utilities.
When you go totally off grid, electrical, there are costs that maybe never recovered. My idea of “off grid” electrical is that you can’t tell the difference between the government grid and your personal grid in an all electric home 24/7. You do it as much for survival as a “fu ck you” to the government.
Keep up your good advice.
The “flipped” houses for sale on the zillow website are real obvious. Appliances have been stripped out, walls spray painted, and sometimes new floor coverings put down.
You can show what I write, on the first try, without any inconveniences or delays, or I can make some other place look credible.