Reply to Is there another "housing bubble"?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I don't think there's a bubble per se, but I do think flippers are essentially stripping the equity out of some neighborhoods by charging up to the very limit of what the market will bear. [/quote]

That's what always happens, what do you suggest, they lower prices?[/quote]

They are inflating prices by doing needlessly expensive flips on houses that may not need all that work. [/quote]

You sound like a cry baby. [/quote]

lol.  the question is whether DC housing costs are inflated. I think that in some neighborhoods, flippers essentially have a monopoly on unrenovated houses that they buy in the 300-400 range, then flip and sell in the 700 range. I think this inflates the price of the home.  FWIW I can actually afford an $800k home, but I did not want to buy a house that someone else had decided to throw away/strip away the equity on with a crappy flip.  [/quote]

I mean, to an extent, this is true. But really it's oversimplified. These flippers aren't buying 300-400k homes for what they are worth. The market rate is probably closer to 500 for a house that is unrennovated (but in a neighborhood where it can get 800 post flip). The challenge is that many of these homes cannot be financed because they are a hundred years old and haven't been maintained. They buy with cash or hard money and turn it into a home that can be sold on the normal market.

The real, unrennovated orice for a home you would fix up yourself (given your upper/lower bounds) is like 500-600. And it's not the flippers buying asbestosy shells causing it to cost that. it's the theee other yuppies who watch hgtv and dream of customizing their kicthebs that you are bidding against.[/quote]

Maybe, but we don't actually know the conditions of these houses.  In some cases these are middle class neighborhoods; it's not like the owners were letting the houses fall down around them.  Likely many of them are fine structurally, have updated electric, functioning systems, etc.  It would be good if we actually knew, though.  [/quote]

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