House-flipping comprises a bigger share of the real estate market in Nevada than in almost every other state, a new report shows, but the investment tactic is becoming less prevalent here and far more profitable elsewhere.
A total of 851 single-family homes were flipped statewide in the three months ending June 30. Those deals accounted for 7.5 percent of all single-family home sales in Nevada in that period, down from 9.4 percent during the same time last year, according to RealtyTrac.
The share of total sales in Nevada was third-highest in the country last quarter, behind Washington, D.C., at 11 percent and Florida at 7.7 percent.
Nationally, flipping accounted for 4.5 percent of single-family home sales, down from 4.9 percent a year earlier, RealtyTrac reported.
The Irvine, Calif.-based housing-data firm defines flipping as selling a home within a year of buying it.
Nevada flippers booked an average $47,761 in gross profit per deal last quarter, essentially flat from a year ago, when average profits stood at $47,923.
Nationally, however, flippers made an average $70,696 in gross profit per deal last quarter, up 42 percent year-over-year, RealtyTrac said.
Those profits represent the flipper’s sales price minus his or her purchase price and do not account for renovations or other costs the investor may have incurred.
Despite the boost in returns nationwide, flippers “should proceed with caution” in the next six to 12 months as price-growth slows and a possible interest-rate hike potentially shrinks “the pool of prospective buyers for fix-and-flip homes,” RealtyTrac Vice President Daren Blomquist said in the report.
The get-rich-quick tactic helped inflate Las Vegas home values during the real estate bubble last decade when investors, backed by easy money, bought property and sold it for profit a short time later.