Based on proprietary data and other publicly available real estate records, LendingHome recently released ‘State of The Flipping Market’ report—focusing on California’s real estate landscape. It revealed an upward spike in the number of brand-new houses flipped in California during the past year, compared to all other states. In addition, California featured as the top state for loan originations in 2017.
The report highlighted that house flipping is an integral part of California’s residential industry. Several aging homes in need of repair undergo a significant upgrade through renovations. Quoting U.S. Census Bureau's American Housing Survey, the report indicated that over half of all homes in the country are at least 39 years old.
The data in ‘State of The Flipping Market’ also reveals the number of flips in each county statewide – from 2014 through 2017. The report findings are based on the growth in the total number of fix-and-flip homes purchased, median revenue per flip and the percent of flips financed with a loan.
According to the report, the rampant flipping activity in California is reflective of a strong seller’s market wherein people looking to buy a starter home will be successful homeowners given their willingness to undertake renovations themselves. To flip a house in California takes 180 days —20 days faster compared to the nationwide average.
Speaking of renovations among millennial homebuyers, a recent report titled “Pins & Properties: Chasing Your Dream Home” by Chase Home Lending and Pinterest revealed that 87 percent millennials are planning some kind of renovation and 68 percent intend to spend at least $20,000 on renovation projects. As most first time homebuyers do not have the income to afford their dream home right away, they purchase starter homes and make substantial upgrades eventually.
Top 5 flipping hot spots in California by county
Los Angeles topped the list with 25.71 percent of total flip houses purchased between 2014 and 2017, recording a median revenue per flip at $140,000. This was followed by San Diego, Riverside, San Bernardino, and Sacramento at 9.55 percent, 8.88 percent, 7.28 percent, and 6.08 percent repectively—the percentage indicative of all flip houses purchased.