Housing investors are flipping out over Fernley.
The Northern Nevada town, near where electric car maker Tesla is building its $5 billion battery factory, ranked No. 1 in the nation for home flips in the second quarter, according to California research firm RealtyTrac.
Home flips, defined as properties sold in arm’s-length sales at least twice in one year, made up 11.4 percent of Fernley’s housing market in the second quarter.
Las Vegas ranked No. 12, with 7.7 percent of the market in flipping activity, but one local submarket placed in the top five.
ZIP code 89104, roughly bounded by Main Street, Charleston Boulevard, Nellis Boulevard and Sahara Avenue, ranked No. 3 among all U.S. ZIP codes with 33.3 percent of closings coming as flips.
Nationally, flips were 4.5 percent of residential sales in the three months that ended June 30.
At 7.5 percent, Nevada ranked second for housing flips after Florida. But the Silver State placed near the bottom for flipping profit.
The average flipped home was bought for $174,718 and sold for $222,480, for a gross profit of $47,761 and a return of 27.3 percent. That return ranked No. 30 out of the 33 states for which RealtyTrac had data. Nationally, the typical flipped home was bought for $196,660 and sold for $267,355, at a gross profit of $70,696 or 35.9 percent.
Illinois ranked No. 1 for average return, at 59.1 percent. The average in California, an important feeder market for Las Vegas investors, was barely above Nevada’s, at 29.9 percent.
With those slumping returns, it’s no wonder flips were down year-over-year — by 20.8 percent in Las Vegas and 2.4 percent in Fernley.
Nor did industry experts say they expect to see a big jump in quick sales.
“Home flippers should proceed with caution in the next six to 12 months as home-price appreciation slows and a possible interest-rate increase could shrink the pool of prospective buyers for fix-and-flip homes,” RealtyTrac Vice President Daren Blomquist said.
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