Flipping, the get-rich-quick tactic that pushed Las Vegas home prices to absurd heights in the boom years, is declining in popularity this year after a boost in 2013.
The sales, in which homeowners unload properties within six months of buying them, accounted for 6.7 percent of local single-family home sales in the first quarter, down from 7.3 percent a year earlier, according to a new report from RealtyTrac.
Statewide, flippers booked around $39,000 in average gross profit on their deals last quarter.
Gross profit is the sales price over the purchase price and does not account for costs the flipper may have accrued after buying the home, such as renovation work.
Nationally, flips comprised 3.7 percent of single-family home sales in the first quarter, down from 6.5 percent a year earlier, though gross profits averaged about $55,600.
Flipping accounted for 7.2 percent of local sales for all of last year, up from 6.3 percent in 2012, according to RealtyTrac.
RealtyTrac Vice President Daren Blomquist attributed the national decrease to a slowdown in home price growth.
“This is another good sign that this housing recovery is behaving much more rationally than the last housing boom, which was built largely on unfounded speculation rather than fact-based calculations,” he said.
Flipping was rampant during Las Vegas’ doomed housing bubble last decade, when investors, often with no real estate expertise but backed by easily obtained loans, bought property and sold it for profit a short time later.
The frenzy caused prices to skyrocket, as small homes that today sell for $60,000 to $80,000 went for $180,000 or more during the boom years.