Real Estate Investing News This Week 2014-11-22
Published on: Saturday, December 19th, 2015
All the Real Estate News That’s Fit to RE-Print™
Welcome to our weekly edition of Real Estate Investing News This Week. Highlights this week include:
- Single-Family Starts Up 4.2 Percent
- Builder Confidence Rises Four Points
- Home Flipping At Lowest Level Since Q2 2009
Newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau show single-family housing production in October reached its highest level since November 2013. In the meantime, the more volatile multifamily sector brought combined nationwide starts activity down 2.8 percent.
The 2.8 percent decline in overall starts in October was due primarily to a 15.4 percent decline on the multifamily side, which brought that sector’s annual production pace to 313,000 units on a seasonally adjusted annual basis.
Meanwhile, single-family starts posted a 4.6 percent gain to 696,000 units.
Builder confidence in the market for newly built single-family homes rose four points to a level of 58 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
All three HMI components increased in November. The index gauging current sales conditions rose five points to 62, while the index measuring expectations for future sales moved up two points to 66 and the index gauging traffic of prospective buyers increased four points to 45.
—But Average Gross Profits Hit New High—
RealtyTrac’s Home Flipping Report shows that 26,947 single family homes were flipped nationwide in the third quarter of 2014. That’s 4.0 percent of all single family home sales, down from 5.6 percent in the third quarter of 2013 to the lowest level since the second quarter of 2009.
A “flip” is defined as a home purchased and subsequently sold again within 12 months.
Investors averaged a gross profit of $75,990 per flip on homes flipped in the third quarter of 2014, a 36 percent gross return on the initial investment — not including rehab costs and other expenses.
- Metro areas with the most flips in the third quarter were Miami (1,190 flips), Los Angeles (1,170 flips), Phoenix (1,147 flips), New York (1,070 flips) and Tampa (789 flips).
- Markets with the best return on flips in the third quarter included Baltimore (88 percent), Pittsburgh (79 percent), Detroit (61 percent), Richmond, Va. (60 percent) and Mobile, Ala. (59 percent).
- Metros with the highest dollar amount of average gross profit on home flips included San Francisco, San Jose, Los Angeles, New York, Seattle and San Diego, all of which had an average gross profit of more than $125,000 per flip.