Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

In what neighborhood? Any tips? We found a (mostly) unrenovated house as well, but I think that's only because the difference between renovation and the actual market price would be to little for flippers to mark up.

'09 south Arlington - you can still find them

Eww k thanks

Hahah my sentiment as well. Just didn't want to say it.

Anonymous wrote:
Wharton MBA is proving how out of touch he is. Symptomatic of a larger problem.

Some people want a flipped house and can pay lots of money to get one.

Many other people don't have the money, or feel comfortable with an unflipped house (perhaps because they DIY).

The problem is every unrenovated house is purchased by flippers with cash, locking out the latter group of homebuyers. The dominance of flipped houses drives up prices for everyone and reduces choice in the market.

Speaking for ourselves, we'd very much like to buy a fixer-upper rather than a flip (within reason - not looking for cracked foundations). It would save us money at the front end and we could customize the home with remodeling projects over time. Unfortunately, the market does not seem to provide this option.

No. You are just proving your are an entitled whiner.

Wharton MBA is proving how out of touch he is. Symptomatic of a larger problem.

Some people want a flipped house and can pay lots of money to get one.

Many other people don't have the money, or feel comfortable with an unflipped house (perhaps because they DIY).

The problem is every unrenovated house is purchased by flippers with cash, locking out the latter group of homebuyers. The dominance of flipped houses drives up prices for everyone and reduces choice in the market.

Speaking for ourselves, we'd very much like to buy a fixer-upper rather than a flip (within reason - not looking for cracked foundations). It would save us money at the front end and we could customize the home with remodeling projects over time. Unfortunately, the market does not seem to provide this option.

Anonymous wrote:

Anonymous wrote:What?!?!?! Flippers are trying to finish a home as cheaply as possible?!?
You are blowing my mind here.
Please tell me more!

Keep up. That's not what this discussion is about. It's about the overall impact on housing price inflation caused by a high %% of flippers.

Thrilling! Go on...

Anonymous wrote:What?!?!?! Flippers are trying to finish a home as cheaply as possible?!?
You are blowing my mind here.
Please tell me more!

Well for example, they added kitchen tile but every tile cracked because they didn't put any cement board or ditra under it. We were first time home buyers and had no clue how tile work is done and even if we knew we couldn't have been able to tell if there was a layer between the tile and the subfloor. Flippers suck. Don't buy a flipped house. Ever.

Anonymous wrote:What?!?!?! Flippers are trying to finish a home as cheaply as possible?!?
You are blowing my mind here.
Please tell me more!

Keep up. That's not what this discussion is about. It's about the overall impact on housing price inflation caused by a high %% of flippers.

What?!?!?! Flippers are trying to finish a home as cheaply as possible?!?
You are blowing my mind here.
Please tell me more!

Good article on the impact of flipping:


http://www.chicagotribune.com/classified/realestate/ct-a-frenzy-for-flipping-houses-real-estate--20170303-story.html

"Flippers, particularly after the housing bubble burst, sometimes have had a bad reputation as damaging neighborhoods by driving up prices too quickly and by forcing first-time buyers out of the market when they can't compete for entry-level houses.

"A house that's been flipped sells on average for $60,000 more nationwide when it's been rehabbed," Blomquist says. "But we see it as a problem only if flips become too big a part of the market, such as more than 7 or 8 percent of all sales. Nationwide, flips were 5.1 percent of all sales in the third quarter of 2016, but there are some markets, such as Memphis, Tampa, Miami, Las Vegas, Phoenix, New Orleans and Mobile that are getting near or above that danger zone of more than 8 percent."

I think some neighborhoods in DC are absolutely well above that 8% danger zone.

The article also confirms that flippers now use cash at high rates (which puts "regular" consumers at a disadvantage).

Yes. Without a doubt.

http://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20

http://www.tradingeconomics.com/united-states/case-shiller-home-price-index

When it will pop? Eh, no idea. And it may 'pop' by inflation (or incomes catch up not prices go down)

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses sell at their value. What the hell people. You don't have to have an MBA from Wharton to understand this. If a house is all gussied up by a flipper, it still sells for what is is worth. Stripping equity?
No.
You not getting a shot at creating equity in a desirable neighborhood does not mean those home were stripped of equity.

2004 called ... it wants its guileless faith in the market back.

also it's interesting that you seem to agree that the flippers are taking value out of the neighborhood. that is the definition of "equity stripping" to me. equity should stay with the house, not be sucked up by a financial transaction.

I don't know about people saying it strips equity (what does that even mean) but I will say don't buy from flippers. My old house was flipped and had so many problems we had to have fixed including many of the new things they installed themselves to save money but did them incorrectly. We couldn't even claim they didn't disclose anything because they never lived in the house and only owned it a few months. The key to know about buying a flip is they usually do things as cheap as possible to make as much money as possible even if that means they do things wrong and you can't come back and complain because they can deny they know anything. If you buy a flipped house you're screwed.

Anonymous wrote:

Anonymous wrote:Houses sell at their value. What the hell people. You don't have to have an MBA from Wharton to understand this. If a house is all gussied up by a flipper, it still sells for what is is worth. Stripping equity?
No.
You not getting a shot at creating equity in a desirable neighborhood does not mean those home were stripped of equity.

2004 called ... it wants its guileless faith in the market back.

also it's interesting that you seem to agree that the flippers are taking value out of the neighborhood. that is the definition of "equity stripping" to me. equity should stay with the house, not be sucked up by a financial transaction.

Anonymous wrote:Houses sell at their value. What the hell people. You don't have to have an MBA from Wharton to understand this. If a house is all gussied up by a flipper, it still sells for what is is worth. Stripping equity?
No.
You not getting a shot at creating equity in a desirable neighborhood does not mean those home were stripped of equity.

2004 called ... it wants its guileless faith in the market back.

Houses sell at their value. What the hell people. You don't have to have an MBA from Wharton to understand this. If a house is all gussied up by a flipper, it still sells for what is is worth. Stripping equity?
No.
You not getting a shot at creating equity in a desirable neighborhood does not mean those home were stripped of equity.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

That's what always happens, what do you suggest, they lower prices?

why does that strip equity?

Because A) they are raising prices by having a monopoly on the cheap housing stock and b) raising those prices further by doing "renovations" that may be unnecessary, that then mean that you are not going to be able to have the same appreciation that you might have had. Basically, the equity is going into the pockets of the developers rather than homeowners.

Sorry, that is an illogical argument - and certainly does not "strip" equity or create an asymmetrical market dynamic.

-Wharton MBA

Ok Wharton MBA. What's your definition of "stripping" equity? Maybe mine does not conform exactly to the current definition, but you know very well what I mean. It's a market failure pushing up prices, but not providing value. Flippers are controlling the market of unrenovated houses, and now you have to pay practically a 100% markup to buy into those neighborhoods. I believe this could result maybe not in a bubble per se, but in over-valuation of houses in some DC neighborhoods.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

In what neighborhood? Any tips? We found a (mostly) unrenovated house as well, but I think that's only because the difference between renovation and the actual market price would be to little for flippers to mark up.

'09 south Arlington - you can still find them

Eww k thanks