Local News

Will Highlands County follow Florida house flipping trend again?

SEBRING - It's not like the mid-2000s, but Steve Fruit is again encountering customers who want to buy a house, remodel and flip it.

"I have one current seller who bought a short sale in Sun N' Lakes Sebring for less than $150,000, and is now listing it for $195,000. It didn't need much work, mostly cosmetic issues," said Fruit, a broker associate with RE/MAX Realty Plus II in Lake Placid.

Six of the top 10 markets for flipped homes are in Florida, and Highlands County often follows coastal trends 12 to 18 months later, real estate agents say.

According to RealtyTrac.com data, the national foreclosure rate peaked at a 50-year high in 2008. In Highlands County, the foreclosure bubble expanded from 310 annually in the early 2000s to 1,508 by 2009.

To a house flipper, all those distressed homes are just an opportunity to buy cheaply, and real estate investors are finding bargains everywhere, particularly in formerly hot housing markets of Florida.

As the housing market recovered last year for most of the country, so did flipping. RealtyTrac, a real estate information service, found that 156,862 U.S. houses were bought and flipped last year. That's 16 percent more than 2012 and 114 percent more than 2011, when the real estate market seemed in its death throes.

The Columbus Dispatch reported on Jan. 30 that 398 houses flipped in central Ohio in 2013.

In Miami-Dade, nearly 6 percent of the houses were bought and resold in six months, the Miami Herald also reported on Jan. 30.

Also using RealtyTrac info in July 2013, Yahoo.com noted the top 15 markets for flipped homes were No. 1 Deltona-Daytona Beach-Ormond Beach, where buying prices were 82 percent higher than selling prices; followed by No. 3 Palm Coast, No. 5 Tampa-St. Petersburg-Clearwater, No. 6 Port St. Lucie, No. 7 Cape Coral-Fort Myers, No. 8 Jacksonville, and No. 15 Orlando-Kissimmee.

RealtyTrac's top 15 also included New York-Northern New Jersey-Long Island, Cincinnati-Middletown, Washington-Arlington-Alexandria, Chicago-Naperville-Joliet, Virginia Beach-Norfolk-Newport News, and Charleston-North Charleston.

So far, flipping here seems minimal.

"We monitored a very heavy volume of flipping during the peak of the boom, but that was an anomaly," said Tax Assessor Raymond McIntyre. "We do not notice any flipping going on currently, other than an occasional purchase of a tax deed followed by a sale within six months, or an investor who renovates a property for a quick turnaround."

Instead, said Clerk of Courts Bob Germaine, "Mortgage foreclosure sales are all going back to the banks. Very few individuals are buying the property. I would say less than 5 percent."

"Buyers have to be careful and really know what they are doing in order to make any money," cautioned Fruit, 2010's Realtor of the Year.

TV shows like "Flip This House," "Flipping Out" and "Flip Men" make turning around a house in 180 days look easy. Don't be fooled, warned Fruit.

"I think the 'reality' shows are a joke, and I suspect many of the so-called 'flippers' that try to emulate them are not successful."

Flipping is not an amateur sport, Fruit pointed out. "You have to be very careful in rehabbing, or you'll get burnt."