Home prices on the rise

According to Bloomberg.com, prices for single-family homes climbed in 88% of U.S. cities in the third quarter. This is attributed to buyers competing for limited inventories that included fewer discounted foreclosures. This is turn, has caused the median transaction price to rise  from a year earlier in 144 of 163 metropolitan areas measured, the National Association of Realtors says in a recent report.  That means a third of all areas had double-digit increases. Pretty amazing news. But what do rising home prices mean for flippers?

It is important to keep in mind that cities with the biggest price appreciation are the ones that had the larger bubble busts and thus a lot more ground to make up. So it makes sense that those areas would have a strong home price appreciation off a low starting point. With cities such as San Francisco and San Jose, California, approaching records, the growth is unsubstantiated making mush of coastal California overvalued.

October rounded out the 3rd quarter with asking prices for residential real estate increasing more than 11% on the year according to Trulia.  This is creating a huge opportunity for flippers all over the country. More sellers are wanitng to put their houses up for sales for fear of “missing the window of opportunity. And further analysts are not yet concerned about a bubble, but quickly rising prices  do often trigger this type of behavior for consumers. Jed Kolko, Trulia’s chief economist stated,  “Although October’s asking home prices rose at the second-slowest pace in seven months, prices are still rising unsustainably fast,” says  “Even though the market is far from bubble territory, we still see the effects of fast-rising prices, including investors flipping homes and would-be sellers waiting longer to put their homes on the market.”  However, price rises are not occurring evenly across the country, however, with some areas seeing more activity than others so it is important to do your research and make sure you know your market.

Here are some current date stats on home pricing:

Trulia reports that the average home asking price rose by 11.7% from October 2012 to last month.

October saw only an incremental rise in home asking prices, at 0.6%, but the year-over-year figure is the largest jump since the housing bubble popped back in 2007-08.

According to recent data from CoreLogic (CLGX), home prices rose 10% from the second quarter of 2012 to the second quarter of 2013 — a figure unsurprisingly close to the 11.7% rise in home asking prices.

So while rising home prices is not necessarily a bad thing for real estate investors, it is imperative to act in a timely manner. Don’t wait to start flipping houses when all the good deals are gone and you miss your window to flip while prices are on the rise.

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