Home "flipping" trend returns, threatening higher prices
(CBS News) LOS ANGELES - Americans are buying homes again. While the latest Standard & Poor's/Case Shiller Real Estate Index revealed nearly 11 percent year-to-year growth -- the largest gain in seven years -- another trend has also emerged, which once again threatens to push prices up more: flipping/buying a home only to resell it.
When the real estate market heats up, Matt Manner springs into action.
"This is our production board," he said, pointing to a white board, filled with black marker. "When it fills up, it means that I'm really busy."
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Manner now has 18 homes that he's fixing -- and flipping. He pointed to one home he bought for $330,000, and plans on selling for $629,000.
The goal, he said, is to double his profit.
The current frenzy, he said, took off in January. That's when Charlotte Dewaele began her search.
"I thought we were gonna get a home right away," she said. She's already bid on 15 homes.
"We're getting beat out by people with cash, by investors, and by people putting in offers that are just so much higher," Dewaele said.
Her expectations were also higher. Her initial hope was to have a home about 1,200 square feet.
"Then that went down to a thousand, and now it's just about anything," she said.
Her search for anything led to a California house marketed as having "charm."
The entire house is 672 square feet and with a list price of $268,000.
"It's overpriced, but it'll probably sell for a lot more than it's priced at right now," Dewaele said.
Dewaele's search is getting more urgent. She's now six months pregnant. She's ready to buy a house and has the money, but she can't.
"It's very frustrating," she said.
Laura Key, Dewaele's realtor describes the current housing market as "a mess." Each time they find a house, they lose out to those cashing in.
"There's always multiple offers. Then it's sold within 24 hours. Then, less than 30 days, back on the market," Key said.
The flipped houses go for at least $50,000 to75,000 more than what they purchased it for.
Dewaele said she can't bid that high without "overextending," as so many others did before the last housing boom went bust.
And she doesn't think she'll find a home before her baby is born. "I've kind of lost hope," she said.