Fresno Home Flipping Is Still Popular

According to Trulia, Fresno is among the best cities for flipping houses. House flipping is a practice that some believe is an indicator of an over-heated housing market. Nationally, it made up a stable of all home sales during the past year, mirroring a steady increase in home prices.

House flipping is a unique housing market metric for two reasons. First, it is a speculative undertaking where investors are betting on turning a profit, and has historically occurred at high rates just before a market peaks. Second, flipping usually entails removing a home from a particular price point in the market and moving it to a higher price point through improvement. That movement creates competition for homebuyers who may be looking to build sweat-equity on their own. But flipping activity also provides improvements to the housing stock for buyers who don’t have time or cash to improve a home themselves.

In the third quarter of 2015, flipping activity held steady year-over-year at around 5% of all home sales. This is down from a peak of 8.6% of all home sales in the first quarter of 2006, but up from a low of if the third quarter of 2008. Why has flipping peaked and troughed over the years? Intense home price fluctuation due to the Great Recession. Selling houses for a gain over a short period generally requires modest price growth at minimum. Even though flippers can add value by improving the quality of a home, rising prices provide a safety net when taking on a project. When prices are rising faster, flippers have greater opportunity to come out ahead even if the project doesn’t go according to plan. Over the past year, price gains have remained relatively stable, and so have flips. This is stark contrast to rising year-over prices from 2003-2006, when flips increased sharply from 5% to nearly 9% of all home sales.

Though flipping has remained relatively stable nationally, flipping activity varies significantly across individual markets. Las Vegas, Nev. leads the pack with 10.4% flips, followed by Fresno, Calif. and Daytona Beach, Fla., with 7.6% and 7.3%, respectively. Detroit and Louisville, Ky., have the lowest share of flips at less than 2.5%. – See more at: http://www.trulia.com/blog/trends/flipping-point-2016/#sthash.ZHMZGBOK.dpuf

What’s Ahead For Fresno Housing Market in 2014?

Well, 2013 was an amazing year for property value comeback. We had an approx. 13% increase in property values overall. This really helped because we lost so much in the downturn for a few years. The market activity really peaked in mid summer, and there has been a very slow but steady decline of sales activity ever since. 2014 is starting out, with relatively low inventory of available homes, which is keeping the values strong, but I do believe that this will change as people realize that they can sell now because they have gained some equity. I know that there is “pent up” demand for people that want to sell their homes, that have been waiting on the sidelines for their values to increase. Well now is the time if ever, to put that home on the market in 2014. Most analysts are predicting single digit appreciation in 2014, so it wont really pay to wait and see. There have also been some changes in the mortgage industry, that will affect the market. For one, FHA has lowered their maximum mortgage amount from $381,250 to $281,250. and FHA had earlier in 2013 raised their mortgage insurance premium costs. This is unfortunate, because Fresno is a huge FHA market with approx. 70% or transactions getting FHA loans. On the other side, conventional financing is many time more attractive with slightly higher 5% minimum down payments. Interest rates are definitely on the rise in 2014 and their have been other important changes in qualifying for a loan. Starting tomorrow Jan. 10. 2014, new lending guidelines, referred to as QM, which stands for “qualified mortgage lending and borrowers ability to repay”. Borrowers must have a maximum 43% debt to income ratio, and they are not considering “compensating factors”, such as a higher cash down payment, assets or money reserves in the bank. It’s all about your income and debts and credit scores period! So if your in the market to buy a home and have been pre-qualified, you really need to meet with your lender again to get a conditional loan approval. Policies have changed now and we need to make certain buyers can qualify under the new guidelines. I look forward to working with more sellers and buyers this year, particularly the “move up” type buyers. I believe that the investors flipping homes is slowing down, because their are fewer opportunities in foreclosures, so 2014 could be the year for “move up” buyers to sell their homes and buy up or downsize. Cash is still king!

Tips For Searching the Fresno MLS

Thank you for using www.FresnoHomes.net as your direct public portal to the Fresno MLS system. This blog post is to help you in your search, so that your home search results will be only the “Active” listings in the Fresno MLS system. The most important thing is the “status” of a property listing, after all, you can’t buy a property that is not available. You need to be conscious of the “prop status” field in the details and results pages, and understand that “Backup” status, is not a listing that is available for sale at this time. You want to find listings that are “Active” status. The purpose of “backup” status is to inform you, that an offer has been accepted and is working through the time frames of contingencies and inspections, or it could be a short sale waiting for the existing lender’s approval of a short payoff, and the remote possibility of a backup offer being taken by the listing agent. If you are serious about buying a home, my advice is to ignore “Backup” status listings and find the “Active” status listings. When you run a search, in the results page, take notice of the status, which is near the top of each listing in the results. Try using the “Advanced Search” function. On the “Advanced Search” page, find the status choices, and select or highlight the “Active” field. The default for searches is both “Active” and “Backup”, so to select “Active” and it will filter out the “Backup” status listings from the results.