Flippers flood back into Manatee's housing market | Real Estate ...

MANATEE -- Real estate flippers are flooding back into Manatee's housing market, where the conditions to turn a profit after a quick fix may be even better now than in the historic rise of the boom.

After being chased from the market by the recession, the practice of buying a property on the cheap, giving it a face-lift and selling to buyers seeking a move-in ready home is back on the rise.

The strategy earned a sour reputation for its role in the housing crisis, especially in Southwest Florida, after many investors cashed in on ballooning property values at the expense of buyers.

But with the inventory of showable listings in Manatee and Sarasota counties now flirting with all-time lows, real estate brokers see the activity as a viable option to rehab a housing stock that took a beating from foreclosures.

"Homeowners could barely make payments let alone paint, fix the roof or landscape," said Marcus Vanzant, owner and broker of Marcus and Co. Realty in Bradenton. "Then these dis

tressed properties come onto the market in aging condition and nobody wants them. Flippers can make them viable again."

Investors in the Sarasota-Bradenton area flipped 653 properties from January to June, a 54 percent increase from the same time last year and 87 percent surge from the first half of 2010 -- one of the highest turnarounds in the country, according to research by RealtyTrac.

Through six months of the year, the average flipper has notched a gross profit of $31,790 in Sarasota-Bradenton, holding the property for an average of 99 days, according to RealtyTrac.

The conditions are ripe for profits to continue.

In Manatee County, the average supply of existing homes has slipped 36 percent in the past year, reaching 4.6 months worth in August -- a mark that traditionally signals a seller's market.

At the same time, record-low interest rates have kept buyer demand at a strong pace for much of the year -- growing 29 percent in August alone, records show.

Because prices are beginning to respond, flippers now can garner a strong return by seeking the scratch-and-dent properties that have lingered at the bottom -- boosting the value through repairs.

It also gives agents something to show.

"The rising prices in some areas are what's attracting more flippers," RealtyTrac Vice President Daren Blomquist told the Herald. "A lot of the inventory available is distressed, they (flippers) buy it at a discounted price, and even the slightest appreciation is beneficial for them."

The breed of flippers in the early 2000s mostly thrived off rapidly escalating property values, with speculators earning millions of dollars while feeding the real estate boom.

Flippers would catch a discount by purchasing a block of homes for cash, then turn around and sell each individually for a quick buck.

The easy money even spurred reality TV shows and growing animosity from families struggling to keep their homes, the ones flippers often preyed upon.

But unlike the market's dangerous rise nearly a decade ago, most flippers now are actually performing work to those houses -- profiting from the foreclosures and short-sales that are sold for less than the borrower owes.

Those repairs can go a long way toward cleaning up a neighborhood, while creating renovation jobs for area contractors, Blomquist said.

"There's a place for good, ethical flippers in the market," he said. "Not all flippers are good players in today's market, but most of the fly-by-night flippers didn't survive the crash."

Areas of the country that were hit hardest by the downturn have seen the steepest resurgence in flipping, led by Phoenix, Las Vegas, Los Angeles and Miami.

There were 14,190 properties flipped in Florida this year through June, a 45 percent climb from 2011 and 70 percent jump from 2010.

In Manatee, 225 properties have been flipped this year for an average profit of $29,676. That's a 56 percent increase from the same time last year and 72 percent gain from two years ago, according to RealtyTrac.

Real estate experts say just like any business, there are flippers who do it right and those with bad intentions.

They stress the importance of a pre-sale home inspection, which should catch issues of faulty work before it's too late.

"With the right property, if you know what you're doing, you can make a solid return," said Peter Crowley, broker and co-owner of the Re/Max Alliance Group in Sarasota and Bradenton. "That's just a reflection of the tight inventory."

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman

Source: http://www.bradenton.com/2012/10/17/4241577/flippers-flood-back-into-manatees.html

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