By Shelley Sakala
As difficult as it has been to even buy a house in Phoenix over the past couple of years, the idea of flipping houses might seem crazy right now. Since the initial COVID-19 quarantine ended, homes had been getting snapped up within days – if not hours – of hitting the market. Just finding a house to buy has been difficult. And when bidding wars break out on a property targeted by home flippers, they are left watching their potential profit margins shrink faster than a cotton shirt in a dryer.
You might think this would chase away the flippers. Think again. According to Realtor.com, Phoenix leads the country in home flipping. It’s our retirees who are driving this surge. As they transition from their current homes to downsized houses, single-story homes, and retirement communities, it creates a new supply of houses that tend to be older and in need of some updates – a home flipper’s dream-come-true. Couple this with the rising Arizona population, job growth, healthy local economy, and low interest rates, and we have the two things every home flipper needs: supply and demand.
Like any other real estate trend, people naturally want to know how this affects them. If you’re looking to buy a house, this means an increase in competition. If you’re looking to sell a house, this increases your chances of selling your home at (or above) the list price. And if you’re simply a happy homeowner with no intentions of moving, a home flip usually means the neighborhood gets a little nicer and your home value climbs a little higher. That’s a double win for you.
The median profit on a home flip in Phoenix is $85,500. That’s a pretty good incentive to invest the time, the labor, and the money into buying and reselling houses. As with any trend, nothing lasts forever. But with no foreseeable end to the housing demand in sight, you can expect home flippers to continue making money as they help drive up home prices, one renovated property at a time.
Shelley Sakala is a local realtor and owner of The Sakala Group Real Estate Team. Learn more at shelleysakala.com.