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House Flipping Hits Highest Levels Since 2002

CoreLogic is out with a new report that says house flipping is on the rise. On a seasonally adjusted basis flipping is now at the highest level since the company started keeping track in 2002.

The high level, though, does not have CoreLogic concerned. The firm, which specializes in consumer, financial and property data and analytics, said in a report that home flipping isn’t being done as much for the short-term profits as occurred right before the real estate crash in 2008.

CoreLogic, which defines flipping as homes sold within two years of purchase, says by the fourth quarter of 2018, the flipping rate in the U.S. reached 10.9 percent of all home sales – the fourth highest rate since it started keeping track in 2002, just behind the first quarter of 2018 (11.4 percent, the highest on record), the first quarter of 2006 (11.3 percent), and the first quarter of 2005 (11.1 percent). The flipping rate in the fourth quarter of 2018 was also the highest rate for any fourth quarter in our flipping data series.

The fluctuations in flipping activity, according to CoreLogic, over time has predominantly occurred not from the involvement of short-term flippers (buying and reselling within six months), but rather from longer-term flippers (one year or more). That could be a combination of:

  1. as prices rise during a housing market expansion, flippers undertake more complicated and time-consuming flips;

  2. less experienced flippers enter the game, and can’t turn around flips as fast as more experienced flippers, or

  3. tax-incentives encourage flippers to take advantage of market appreciation by holding onto properties longer.

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