More money for Seattle home flippers now than at peak of real estate market
You can make more money flipping a home in Seattle than you could at the peak of the housing market in 2006.
According to real estate company Redfin, 2013 was a record-setting year for gains, averaging $113,600 per home in Seattle. That number was $87,000 in 2006.
Troy Martin, data scientist with Redfin, told KIRO Radio they believe the level of activity is a little lower, so people are doing more upscale rehabs and selling nicer homes.
Redfin looked at neighborhoods in each market since 2001 to see where flippers were making the biggest gains and three areas in Seattle made the list: Rainier Valley, West Seattle, and Delridge.
“Particularly in West Seattle, it’s been a little less competitive so I think people who are interested in doing some home flipping might have some more options there in terms of finding a property to rehab and flip,” explained Martin.
The average gain from a flip in Rainier Valley was $153,000 and in West Seattle, the average gain was $143,400.
That’s the good news. The bad news? Those numbers don’t reflect the cost of rehab or remodels.
“Those improvements can range from simple cosmetic changes to completely gutting an entire home, which makes it difficult to pinpoint actual costs for each of the homes in this analysis,” Redfin noted in the study.
If you’re thinking about getting into the flipping game, Redfin agent and experienced flipper Al Medina said it’s a lot more work and you take on a lot more risk than what the TV shows reveal.
“Rehabs can range from basic improvements, such as painting, re-carpeting, and updating kitchen and baths to full gut jobs, which can range anywhere from $60 to $120 per square foot,” Medina said in the study.
Redfin also determined more individuals are getting into the business, as opposed to banks.
“In 2008, about (75 percent) of these homes that were being flipped were being flipped by banks. That number in 2013 was down about 35 percent,” Martin said.
Across the nation, the average gain from a flipped home was well over $100,000. The markets studied with the highest gains are San Francisco, Long Island, and San Jose. Markets you don’t want to explore: Atlanta and Las Vegas.