House flippers are slowing down in Las Vegas and making less money than investors nationally, but they’re still doing plenty of deals here and booking strong profits, a new report shows.
A total of 2,992 single-family homes were flipped in Southern Nevada last year, down 19 percent from 2013, according to RealtyTrac.
Flipping accounted for 9.8 percent of homes sales in the area last year, down from 10.8 percent in 2013.
Nationally, the number of housing flips fell 11 percent from 2013 and accounted for 5.4 percent of single-family home sales last year, down from 5.9 percent in 2013.
RealtyTrac, based in Irvine, Calif., defines a flipped house as one that got sold less than a year after it was bought.
“Investors have picked much of the low-hanging fruit when it comes to home flipping over the past three years since home prices bottomed out in the first quarter of 2012,” RealtyTrac Vice President Daren Blomquist said in the report. “As home-price appreciation slows to single digits in most markets, flippers need to be more selective and creative about the properties and neighborhoods they target.”
The get-rich-quick tactic helped push Las Vegas home values to absurd heights in the boom years last decade when investors, often with no real estate experience but backed by easy money, bought property and sold it for profit a short time later.
Home prices are still well below the bloated days of the bubble but have climbed almost 70 percent since hitting bottom in early 2012, rising from a median $ 118,000 for a single-family house to $ 200,000 last month, according to the Greater Las Vegas Association of Realtors.
The boost was largely fueled by investors buying cheap homes, often in bulk, to turn into rentals, which means flippers had plenty of opportunities the past few years to make a fast buck.
Las Vegas flippers in the fourth quarter last year bought homes for an average $ 166,727 and sold them for $ 209,069, producing an average $ 42,342 in gross profits, or a 25 percent return on their investment, RealtyTrac found.
Nationally, flippers in the fourth quarter paid an average $ 177,934 for a single-family home and sold it for $ 243,928, giving them a gross profit of $ 65,993, or a 37 percent return.
The returns do not account for renovations or other possible costs the owners incurred before selling.