6 things to know before you flip a house

With low interest rates, tight inventory and high demand for entry-level homes, the number of houses being flipped (i.e., bought and resold within 12-months) in the U.S. in the first quarter of 2016 reached nearly 44,000, or 6.6% of the total home and condo sales in the U.S. That’s the highest percent since 2006, when nearly one in 10 houses bought was a so-called flip, according to Irvine, Calif.-based RealtyTrac, a real-estate research group.

“Home flipping has been gaining steam for the last year and a half thanks to falling interest rates and a dearth of housing inventory for flippers to compete against,” said Daren Blomquist, senior vice president at RealtyTrac.

The shortage of entry-level homes is particularly key to the flipping boom. in May reported that the rate of single-family groundbreakings in the U.S. for 2016 was just 1.1 million, well below the projected necessary 1.5 million homes needed to keep up with demand. Worse, builders were focusing on luxury homes, not entry-level ones. Current national inventories of available starter and move-up homes were both down almost 10% compared with a year ago, Zillow said.

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