Daytona Beach is historically known for its  hard-packed sand that  allows motorized vehicles to drive on the beach in restricted areas. But soon it may be known for  being one of the best flipping markets in the US. While the hard-packed sand made Daytona Beach a mecca for motorsports, it may be their propensity for a property flip that gets them in the news.

A recent national report has listed Volusia County as the fifth most profitable place in the country to flip homes. Daytona Beach is a city in Volusia County, Florida, United States. The city lies about 51 miles (82.1 km) northeast of Orlando, 86 miles (138.4 km) southeast of Jacksonville, and 242 miles (389.5 km) northwest of Miami. In the 2010 U.S. Census, it had a population of 61,005. It is a principal city of the Deltona–Daytona Beach–Ormond Beach, Florida Metropolitan Statistical Area, which was home to 494,593 people in 2010. Daytona Beach is also a principal city of the Fun Coast region of Florida.

RealtyTrac reported 168 homes sold in the second quarter in the “Deltona-Daytona Beach-Ormond Beach” area by sellers who owned those properties for one year or less. The average gross profit was a whopping $49,000, for a 63 percent return, according to the Irvine, California-based real estate research firm.

Located in the Southern United States, the state’s  name derives from the Mississippi River, which flows along its western boundary. Jackson is the state capital and largest city, with a population of around 175,000 people. The state overall has a population of around 3 million people. Mississippi is the 32nd most extensive and the 31st most populous of the 50 United States. On multiple other rankings, however, Mississippi ranks last of all states, such as in health, educational attainment, and median household income.

Maybe this is why the state is not a great state to invest in real estate? As home prices have retreated significantly across the country, flipping is starting to become popular again. But real estate sources say Mississippi’s market is not quite as “flippant” as some of the other southern states.

“This is not a flip state,” said Cynthia Joachim, broker associate with Coldwell Banker Alfonso Realty Inc., Gulfport. “You buy in states like Mississippi, you buy to hold. We don’t see much flipping here because we don’t have the business climate for it. For a flip market to work, you need a constant flow of buyers moving quickly. Real estate is best as a long-term investment. It was never intended to be a liquid investment. When it is treated as a liquid investment, that is dangerous for investors and the economy.”

It is important to remember that flipping houses holds risk. We have talked about how to reduce that risk but sometimes people think they can pay $50,000 for a house, and sell it for $100,000. Then, after fixing it up, they have trouble getting $60,000. Flipping houses  is not for everybody and not for every region. As long as property values are appreciating, flipping works. When people read about flipping in Southern California and South Florida it makes them think that can happen anywhere but the economics of the state have to be strong for this to work.

Most home buyers being seen by Ken Austin, broker\owner Mississippi Coast Realty, are people who are buying to thicken their rental pool.

“I have not seen a lot of people house flipping,” Austin said. “I saw a lot of foreclosures and 90 percent of the foreclosures we sell are for rental properties.”

But there has been some success. Like in the  Golden Triangle area with investors flipping houses.

“We do have investors in our area who make it a practice to purchase homes that may be in foreclosure or in disrepair with the intention of renovating the home for resale,” Kris Davis, broker/owner, Re-Max Partners, Starkville and Columbus, said.“These investors are able to purchase the home at a reduced price because the repairs that are needed prevent the home from qualifying for a traditional mortgage. Investors purchase by cash or an in-house bank loan that does not have the same requirements for the condition of the home.”

So Mighty MS may not be the best place to flip houses but the key is to know your farm area. Anybody can really make money in any region if you know what you are doing.

Source: Mississippi Business Journal online

http://msbusiness.com/blog/2014/08/29/flipping-flipping-houses-popular-much-country-mississippi/

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Recently  Zillow ranked the healthiest real estate markets in the US.  The “health” of housing markets is ranked on a scale of zero to 10. The rating takes into account several sets of data, including home value increases or decreases and the average number of days homes remain on the market.

It is amazing that all but one of these markets is in the same state. One would expect that the Sand States would be on the list. Check out the top 5 healthiest market right now in the US and some might surprise you.

#1 Pittsburgh, Pennsylvania (9.72)
We’re #1! Did this really surprise anyone? Despite the longest average time to sell a home on this list at 111 days, Pittsburgh takes the title of the “Healthiest Market in America”, thanks to having some of the most responsible and financially solid homeowners in the country. Not to mention they have been riding the recovery wave all year long.

With the lowest rate of mortgage delinquency on the list,  (less than 4%) Pittsburgh homeowners are sitting pretty. When you combine this with an extremely low foreclosure rate and a very affordable market (average home value is $123,300), it’s not a bad time to be a Pittsburgh homeowner.

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AKA the NOW generation, they are characterized by a more self-absorbed attitude, and born since 1980, the Millennials are the demo most criticized for their spending habits.  Still living with mom and dad… frugal or family fail?

Some studies have even gone as far as to say they are holding back the surge of the economic recovery with avoiding big purchases like houses and cars.  While other surveys mark Millennials as a generation of “super savers” burdened by a “Depression-era mentality.”

One thing is for certain: Millennials are and continue to be molded by the financial crisis. The Transamerica Center for Retirement Studies reports that Millennials start saving for retirement (mostly through 401(k) plans) at a much earlier age, 22, compared with older workers. Like their older Gen-X siblings, but unlike their boomer parents, two-thirds of Millennials expect to self-fund retirement, not believing Social Security will be available for them.

As a generation  “permanently scarred by the 2008 financial crisis,” they are left  insecure about job prospects and uncertain about future earnings potential. As a result, Millennials take an “extremely conservative” approach to finances, holding 59 percent of their assets in cash and fixed income instruments rather than investing in stocks — just like their Depression-era grandparents. Funny how sometimes history repeats itself.

But does holding nearly 60 percent of your money in cash make economic sense for a young person? Most would say no. But Millennials are very gun shy at Wall Street for sure. Their generation’s financial conservatism, citing student debt, a tough job market, a decade of war, the real estate bubble and market meltdown are all good reasons to be gun shy. It seems for many of their generation, finding meaningful work and sharing experiences are higher priorities than building a stock portfolio or buying a house.

Which brings us to our next point that Millennials make great flippers.  Although most would describe themselves as  “insecure,” this hasn’t held them back. Overcoming their  “negative stereotype” we are seeing a lot of them not only avoiding the stock market,  but also preferring local real estate. They are investing in their community.

It seems Millennials truly march to the beat of their own drum, with a side of humor and enthusiasm. And while they may not be investing in housing, cars or the stock market to the extent economists and brokerage houses would like, many are investing themselves in molding the world they will inhabit. Here’s to our future generations.

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Pittsburgh #1 for Rate of Return on Rehabbin

Number one on the list for best returns was to no one’s surprrise, Pittsburgh. According to the company’s Q2 2014 U.S. Home Flipping Report, Pittsburgh flippers  more than doubled their money in 2014.

Here is some other interesting finds from the new report:

Nearly 31,000 single family homes were flipped nationwide in the second quarter of 2014 — where a home is purchased and subsequently sold again within 12 months — representing 4.6 percent of all U.S. single family home sales, down from 5.9 in the first quarter of 2014 and down from 6.2 percent in the second quarter of 2013.

Investors averaged a gross profit of more than $46,000 per flip on homes flipped in the second quarter of 2014, a 21 percent gross return on the initial investment. The average gross return was down from 24 percent in the first quarter and down from 31 percent a year ago, which was the peak in percentage return on flips nationwide since RealtyTrac began tracking the flipping data in the first quarter of 2011.

So who else had some great rates of returns  New Orleans was on the heels of the Pittsburgh flippers with 76 percent next was Baltimore (73 percent),  followed by Virginia Beach, Va. (66 percent) and Daytona Beach, Fla. (63 percent).

Here’s the Top 10 List:

• Phoenix
• Los Angeles
• Miami
• Riverside-San Bernadino, Calif.
• Atlanta
• New York
• Tampa
• Chicago
• Las Vegas
• Denver

Source: RealtyTrac

About RealtyTrac 
RealtyTrac is a leading supplier of U.S. real estate data, with nationwide parcel-level records for more than 129 million U.S. parcels that include property characteristics, tax assessor data, sales and mortgage deed records, Automated Valuation Models (AVMs) and 20 million active and historical default, foreclosure auction and bank-owned properties. RealtyTrac’s housing data andforeclosure reports are relied on by many federal government agencies, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

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Is your investing strategy “buy and hold”? Many flippers start their cash flow out that way; purchase a house, fix it up quickly and start renting right away. Seems like a smart move since many new studies are showing that renting is the way to go for more and more American families. But why is the renting market becoming so hot? With families needing the space of a home but not being able to afford one or unwilling to commit to a mortgage, there is ample opportunity for investors to make money in the rental industry Many investors are buying up houses and converting them into rentals, and government policymakers say it makes sense to encourage this. A smart investing move is flipping affordable rental units that not only help with your cash flow, they could help working families with low incomes, while also helping to revive residential construction jobs in your area. Seems like a win-win situation, right?

The rental market is for sure taking off. And you can see the growth with rental property management companies growing too. One  company added 5,830 new properties nationwide through the second quarter this year. The rapid growth has been primarily fueled by real estate investors, both large and small, who purchase single-family homes as rental investments.

Even though homes seem  very affordable now by many official measures, one of the most notable features of post-crash America is the rise of the renter. People who have lost their good credit record, lost their confidence in the housing market, or lost secure jobs have been shifting from being owners to renters. Young people who in prior decades might have been buying first homes are living with parents or renting.

While this is positive news for investors, others ask if it is a troubling trend. Despite a sharp plunge in home prices and the conversion of many properties from “owned” to “rented,” the typical family looking to rent has to pay more than 30 percent of its income for a typical apartment, according to an annual survey released Monday.

For the 1 in 4 renters who have very low incomes, moreover, it’s common to spend more than half their earnings on rent. By 2010, a US Census measure of homeownership had fallen from record levels of near 70 percent of households to about 65 percent.  And even many home buyers could justly be called renters for now because sunken home values have erased any buildup of equity when they make their monthly payments.

The pendulum shift is partly a reversion to the norm. But it also hints at a hard reality of housing: Affordability is still a big challenge – even at a time of low interest rates.

Renting can have many advantages over buying, the recent surge in demand, rising rents, and falling incomes have caused an increasing number of households to pay a crushing share of their income for housing. What do you think?

More on The Rise of Renters:

http://www.azcentral.com/story/money/business/2014/06/18/in-wake-of-the-housing-bust-more-americans-are-renting/10760775/

http://journalistsresource.org/studies/economics/real-estate/u-s-low-income-rental-housing-crunch#

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Sure it has become far more common for home buyers to find their  price first through a site like Zillow and only involve a real estate agent once they are ready to buy. Homeowners are now able to both view and sell houses and rentals online rather than having to go through “MLS listings”, a traditional real estate agent, or Realtor.com. These websites are beginning to completely displace old networks of Realtor and real estate agencies as more and more sellers, buyers, and agents are conducting business through these sites. Both market places create the majority of their revenues by selling marketing and premier services to realtors.

For most of 2014, Zillow has been a solid performer in the stock market, gaining  by more than 80% as compared to Trulia’s 20% gains. It is hard to identify a reason for the disconnect. From an operational standpoint, the two companies are very similar, although Zillow is larger. For example, Zillow ended June with 83 million users, far more than the 53 million that Trulia had at the end of that same month. Examining these metrics from a year-over-year growth perspective, Trulia’s 55% increase outpaced Zillow’s 49% user growth.

With that said, Trulia is outperforming Zillow on many different fundamental metrics, mainly revenue growth. Looking ahead to the next two years, Zillow is expected to grow revenue by 57% and 35%, respectively. Meanwhile, Trulia should grow 76% and 32%, respectively, during the same two-year period.

At first glance, the two sites appear to be twins. However, they have less in common than it seems. As Zillow is favored by property buyers, Trulia is the BFF of  sellers. Interestinly, two-thirds of Zillow’s visitors do not use Trulia. Zillow is widely know for its  “Zestimate” of how much a property is worth, while Trulia offers more analytical tools, such as detailed information on local criminal activity. And Trulia is faster-growing.

But here’s the twist.

In what it seems as real estate’s first wave of technology firms consolidation, the acquisition of Trulia by competitor Zillow, for $3.5 billion in stock has made headlines. The San Francisco and Seattle companies will remain independent brands, with Trulia‘s CEO reporting to his Zillow counterpart. But they will create a giant capturing 71% of unique visitors to real estate websites. Zillow reported 83 million users for June 2014, and Trulia 54.

The logic behind the merger acquisition is simple: while Zillow and Trulia focus on home buying, they are really media companies, not brokerage businesses. As such, they generate revenues through advertising, and need high traffic. It seems cost-cutting, network effects and pricing power are the financial dynamics behind the merger.

Do you use Trulia or Zillow for your investment deals? What do you think of the merger?

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The firm’s recent data showed just 3.66 percent of home sales in the five major neighborhoods were flips during the first quarter. The percent dropped  from 12.39 in the first quarter of 2013. “Even though there are a lot of distressed properties [on the market], there’s not as much margin for them to work with, in terms of home prices rising quickly,” said Daren Blomquist, a vice president at RealtyTrac.

Broken down by borough, RealtyTrac data shows that 2.31 percent of Bronx sales were flips; 1.3 percent of sales were flips in Brooklyn; 7.69 percent of sales were flips in Manhattan; 2.75 percent of sales were flips in Queens and 8.39 percent of sales were flips in Staten Island. Nationwide, the percentage of single-family home sales that were flips dropped to 3.7 percent in the first quarter, compared with 6.5 percent a year earlier, according to RealtyTrac. In general, flipping is down nationwide because there are fewer distressed properties on the market as home prices have increased, after bottoming out in March 2012, Blomquist said.

But what is the reason behind this not so great news for New York flippers? Two statistics will help us understand this.

1. The average sales price for NYC residential real estate (co-ops, condos and 1-3 family sales) reached a record $975,441.

2. The average sales price for NYC residential real estate excluding Manhattan reached a record $542,216.

Record sales? This is great news for home owners. With confidence in the market being back up, home owners now feel like they can get more for their homesteads, and they are right.

In contrast, flipping reached a low point in the first quarter of 2012, when 1.27 percent of sales were flips – a reflection of investors’ lack of confidence.

Don’t count the Big Apple out yet though. There are still deals to be found in neighborhoods like Harlem or parts of Brooklyn. There’s ample flipping at trophy apartments, particularly in new development buildings, where the mentality of “the more you spend, the more you make” exists. Go big or go home, right?

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Earlier this summer Denver was listed as one of the top 10 best markets in the country for millennial homebuyers by the National Association of Realtors. According to the association’s research, 15.7 percent of the Denver metro population in the years between 2010 and 2012 were millennials — typically defined as people born after 1982 — and the growth in private payroll jobs from May 2013 to May 2014 was 2.7 percent, contributing to an overall unemployment rate of 5.9 percent.

However, the availability of homes continues to be a problem for young homebuyers in Denver, with a 20 percent drop in inventory year-over-year in May.But the ever-increasing population of people under 35 in the area means that millennials will inevitably become part of the home-buying equation.

What is happening in Denver though is a classic case of supply and demand. Prices have skyrocketed over the last few years leaving many new home buyers, including the millenials wondering if they can afford a new home. Metro-area home values hit another all-time high in May — good news for people who already own houses but bad for businesses trying to lure workers from other cities.

The S&P/Case-Shiller Home Price Indices reported Tuesday that Denver’s home price index reached 152.58, ticking past previous highs of 150.58 in April and 148.18 in March, and up 8.2 percent from May 2013.

The Case-Shiller Index, a closely watched measure of real estate values, tracks the resale of houses in three price tiers over time and does not include condominiums. The 152.58 level means that home values in May were, on average, 52.58 percent higher than in January 2000, the benchmark month.

“If you live here and own a house, it’s great news,” said Metro Denver Economic Development Corp. CEO Tom Clark. “If you are trying to come in from the Midwest or Texas, it’s a challenge. For many folks it can be sticker shock.”

Bottom line, rising house values mean it is a great time to sell your house in Denver, but if you are trying to invest in the area, don’t expect any great deals just yet. According to data provided by Zillow, home prices averaged $253,000 in metro Denver in May exceeding the pre-recession peak.

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But why such a huge tax and why now? San Diego house flippers grossed an average of $113,800 per home in 2013, according to real estate firm Redfin. But San Francisco turned out to be in a league of its own. There the average house flipper gained just under $200,000—which is to say, a better payday than the total annual earnings of 95% of households in America. Seems amazing doesn’t it?

The measure, placed on the ballot by supervisors John Avalos, David Campos, Jane Kim and Eric Mar, is designed to deter house flipping. Why do they say flipping is bad for the Bay area. According to the supervisors, the practice of buying, renovating and then quickly selling property they say is reducing the amount of rental properties on the market at a time when demand is increasing.

Opponents said a tax on housing will not make housing more affordable or plentiful. Is such a high tax the right answer? Other objections, voiced during a rally on City Hall steps recently, include that some people flipping property are “mom and pop” investors, not just big-money speculators.

“It’s the wrong thing to do at a time when there is a shortage of housing,” said Noni Richen, president of Small Property Owners of San Francisco Institute. “Raising the cost of housing raises the cost of rent.”

The idea of imposing an anti-speculation tax was first backed by former Supervisor Harvey Milk in the 1970s. It was one of the final pieces of legislation he was working on prior to his assassination, according to the San Francisco Anti Displacement Coalition, a group of tenant organizations backing the measure.

The idea got new life recently amid the rising outcry over escalating home prices and renter evictions that sometimes precede home sales. Also helping fuel the outcry were the recent reports from Redfin spot lighting the high returns investors gained in 2013. Supporters hope that curbing the financial incentive for flipping may help slow the forces that are helping to drive up property prices. What do you think?

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