RealtyTrac ANALYSIS: Once upon a time, there was a group of folks known as home flippers. They bought houses that needed some TLC, fixed them up, then sold them for a profit. The real-estate equivalent of day traders, they mostly went extinct during the housing crash.
Except on television.
Please bear with me as I somehow try to weave the disparate threads of the real estate market, house flipping and gay marriage with data analysis and television ratings.
Let’s start with a suspect headline. It read “43% of 2014 home buyers paid all cash.” That would be a fascinating data point, if it were true. It probably isn't.
The data from RealtyTrac was a bit confusing, and perhaps we can excuse some of websites and radio stations that ran with it.
The confusion seems to arise from this week’s Institutional Investor & Cash Sales Report, which showed that 42.7 percent of U.S. residential property sales in the first quarter were for cash. That was up from 19.1 percent in the same period one year ago, a large and suspect increase. The National Association of Realtors data, which is broader and tracks actual closings, puts all-cash purchases at 33 percent in March 2014, up a bit from the 30 percent a year earlier. There are different methodologies and data sets used by the two organizations.
About this time, the astute reader might be wondering what constitutes a house flip. From RealtyTrac, we learn that it refers to any property “where a home is purchased and subsequently sold again within six months.”
As it turns out, this is only a very small percentage of single-family home sales -- 3.7 percent last quarter. That’s down from 4.1 percent in the fourth quarter of 2013 and 6.5 percent in 2013's first quarter, according to RealtyTrac's 2014 first-quarter U.S. Home Flipping Report.
Flipping, apparently, isn't what it used to be.