Home flippers have found themselves in quite the predicament. With home prices rising and foreclosure moratoriums in place across the country, finding a great deal has gotten harder than ever -- especially in some bigger markets. Is it impossible, though? Definitely not. Are you on the hunt for your next flip? Here’s where you might want to look.
Where home prices are falling
Nationally, home prices were up 14.8% year over year in September, according to the National Association of Realtors (NAR). But remember: Real estate is local. In some markets, there’s actually a good chance of decline.
According to CoreLogic’s (NYSE: CLGX) recent data, there are five markets where home prices will very likely drop (think 70% chance or more) in the next year. Those include:
- Lake Charles, Louisiana
- Las Vegas
- Springfield, Massachusetts
- Modesto, California
In the New York City-Jersey City-White Plains market, home prices have already dropped, falling 0.1% since August of last year.
Where to find foreclosures
Despite foreclosure moratoriums and other homeowner relief measures, some markets are still seeing a fair share of foreclosures. If you typically invest in these types of distressed properties, your best bets are in South Carolina, which had the highest foreclosure rate for third quarter 2020, according to ATTOM Data Solutions. There, one in every 2,339 housing units saw a foreclosure filing. Illinois, New Mexico, New Jersey, and Delaware rounded out the top five states in terms of statewide foreclosures.
At the market level, foreclosure rates were highest in these cities:
- McAllen-Edinburg, Texas
- Davenport, Iowa
- Shreveport, Louisiana
- Columbia, South Carolina
- Rockford, Illinois
Keep in mind: These are just foreclosure filings. Thanks to legislative and pandemic-related holdups, the foreclosure process can take quite some time under current conditions. In New Jersey, for example, it takes over 1,500 days, on average, to foreclose on a property. The national average is 830 days.
The Millionacres bottom line
It may be more difficult to find a bargain-basement deal right now, but it’s not impossible. Do your research, consider buying outside your typical markets, and consider making cash offers to give yourself more leverage. Just don’t sit it out. WIth homebuying demand where it is now, the opportunity for profits could be big.