Reply #5: Not Everyone Is Doing Cartwheels Over 'Flipping'

[54anickel]

http://www.latimes.com/business/la-fi-flip18jul18,1,2849066.story?coll=la-headlines-business

In the last 12 weeks, Nick Manfredi has bought eight homes in the Riverside area. Not to live in but to sell as quickly as possible, for as much as possible.

He picked up one Corona four-bedroom for $201,000 on July 5 and, he boasted, was in escrow for $267,000 two days later. A speculator who specializes in what's known as flipping, he's a sign of the times: Real estate isn't much of a gamble in a market as hot as Southern California's has been for the last 12 months.

"Most people are so euphoric, they are in big denial that 1991 can come again," Manfredi said, recalling when the last L.A.-area housing market bubble burst.

Not everyone is in denial. Real estate experts noticed that in May the number of homes sold that had been owned by the sellers for six or fewer months was 47% higher than it was a year earlier. And these constituted 3.1% of all homes sold in the month — nearing the flipping record of 3.5% set in early 1989, according to DataQuick, a La Jolla real estate information firm.

"I don't think we are in a big speculative bubble right now, but the fact that these numbers are on the rise is something we are closely watching," said John Karevoll, an analyst with DataQuick.

more...