High-end home flipping is on the rise in New York.
Strong demand for New York City neighborhoods like Brooklyn’s Williamsburg has potential flippers angling for a quick turnover this fall.
For example, a two-bedroom apartment at 60 Broadway (left) in Williamsburg, which sold for $950,000 in August, hit the market again this month at $1.3 million, according to real-estate blog Curbed NY. That’s a 37 percent price hike.
It’s an area-wide trend. In the third quarter, more than 2,000 single-family homes in the New York metro area were flipped, or purchased and resold within six months. That number marked a 14 percent increase from the year-ago quarter. Flips of high-end single-family homes, condos and co-ops priced above $750,000 spiked 56 percent, according to real estate research firm RealtyTrac.
Nationwide, flipping has slowed, especially in formerly hot areas like Orlando Fla., RealtyTrac said.
But New York’s combination of tight inventory and rising prices is driving a wave of metro-area flipping. For the last year, New York has been one of the nation’s top three markets for high-end flips.
“The continued flipping is a sign that New York is moving from distress to a more healthy market,” said Daren Blomquist, vice president of RealtyTrac.
A controversial and risky practice, flipping is fashionable again as memories fade of flipping failures when the real estate bubble burst. HGTV’s new show “Flip or Flop” is a big hit, and investors see more profits ahead in high-end flipping. Private equity firm Colony Capital and a partner just invested $50 million in American Coastal Properties in California, mainly to fund high-end flipping.
Experts distinguish today’s flipping from the mania before the bubble burst. All-cash transactions are common, and tight lending hampers buyers seeking financing for a flip.
“Credit being tight is part of the reality check here,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel.