Home flippers in Pennsylvania seeing success

Cities in Pennsylvania have benefited from an increase in home flipping.

House flipping increased 20 percent in the first quarter of 2016 across the country, compared to the last quarter of 2015, according to a recent report by RealtyTrac. Compared to the first quarter of 2015, they are up 3 percent. In the U.S., 6.6 percent, or 43,740, of all single-family home and condo sales were flips.

Nationally, East Stroudsburg was the market with the highest average gross flipping ROI in this quarter, with 212.1 percent. Reading followed with 136.4 percent, and Pittsburgh took third with 126.8 percent. Philadelphia was also mentioned for having a higher average gross flipping ROI with 103.7 percent.

York-Hanover was mentioned to be one of nine out of 126 areas analyzed that had an all-time high of home-sharing.

“After faltering in late 2014, 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. “While responsible home flipping is helpful for a housing market, excessive and irresponsible flipping activity can contribute to a home price pressure cooker that overheats a housing market, and we are starting to see evidence of that pressure cooker environment in a handful of markets.”

However, Blomquist added that the current numbers are not historically high, and house flippers are behaving “rationally and responsibility,” by buying with cash, which generally keeps them spending within their means.

Homes flipped in this quarter had an average gross profit of $58,250, which is the highest average gross flipping profit since the fourth quarter of 2005.