Thread by @housing_alex

1 in 4 flippers sold their homes for LESS $$$ than expected in our 4Q22 survey. Elevated rates and falling home prices are scaring buyers wary of buying on the way down, but investors are clearly looking to acquire now and refinance later. 🧵Flipper comments to follow ->

#Austin flipper: “Austin has an overinflated housing market that is compounded by elevated interest rates. This has resulted in a downward spiral in qualified buyers. The fix and flip market is pretty much gone. Prices in most areas are down about -30% or more in recent months.”

#Baltimore flipper: “We’re looking forward to a big 2023. I hate to say it, but a lot of it’s going to be on the backs of consumers with hardships, or circumstances where they have no other options. But that’s our bread and butter.”

#BendOR flipper: “Foreclosures are happening now so more homes are available. Still a strong market, although prices are softening.”

#Boulder flipper: “There is a bigger inventory of homes that need work, but fewer buyers looking for homes that need work. Well-done flips are selling well, though prices are down.”

#Charlotte flipper: “Market is evening out. More homes are available to buy, but prices are still high.”

#Chicago flipper: “Rates are up and home prices are down. Perfect opportunity to buy!”

#ColoradoSprings flipper: “It’s turning into a buyer’s market, which makes acquisition easier but

#Dallas flipper: “Market prices seem to be dropping. Hopefully interest rates will follow.”

#Denver flipper: “Interest rates have eliminated 35-45% of our target market. The last half of 2022 was terrible for us. I was willing to take the risks, but we took a beating and it will take me all of 2023 to get back to even if I’m lucky.”

#EastBayArea flipper: “I lost some money on my last 2 rehabs due to market shifts. I do feel it will recover by 2Q23 and will at least be stable again.”

#FortMyers flipper: “Interest rates are working against us and sales are down. We are hopeful that as inflation slows, the rates will drop. We hope rates will be under 6% by summer and sales will pick up.”

#FortWayne flipper: “Being careful about initial purchase and rehab budget as values are most likely going to fall in the coming 24 months.”

#GreensboroNC flipper: “Prices are softening in this market, so we are buying with this in mind and lowering our (after-repair value) ARV requirements for homes that we will sell 4-6 months out.”

#Hartford flipper: “In 2020-2021 people overpaid for homes and now those homes have no equity. Some are commuting back to work and dealing with higher gas prices and inflation. I predict there will be many people who will have to sell or short sale.”

#LasVegas flipper: “Waiting for the market to decline further.”

#LosAngeles flipper: “We held out for the last two years, not willing to pay overinflated prices as some flippers are now stuck with properties not moving. Our strategy is to buy directly from homeowners in pre-foreclosure, short-sale, or buy in bulk from banks.”

#Orlando flipper: “Current after-repair value (ARV) will not be the same in a few months. The market is tanking fast due to higher interest rates and buyers cannot get their numbers right at the banks. Market outlook looks gloomy.”

#Philadelphia flipper: “We are taking on fewer flips that require large renovation and instead are looking for light projects. Going forward, we believe we will sell more homes to other investors and keep more as rentals based on the current market.”

#Phoenix flipper: “As of now, we’re waiting for values to drop more before getting back in the game. Planning to possibly buy again in the middle of 2023.’

#ProvoUT flipper: “Had to sell one flip at a loss after interest rates rose and buyers disappeared. Had it under contract to close for a $350K profit. Now we are selling it at a big loss and are having to come to the closing with cash just to get it off the books.”

#RiversideSanBernardino flipper: “It’s too unpredictable currently to try to fix and flip unless I find some amazing price on the sale that I just can’t pass up and make it worth the investment. Otherwise I would buy with intention of rehabbing, renting, and refinancing.”

#Sacramento flipper: “My margins were already low, so I’m having to short-sell some properties and need to start over with buying smaller projects. Getting caught in a declining market holding 40+ projects has put me in a horrible position.”

#SanDiego flipper: “Acquired more properties than I could fix over the last 2 years. Hired staff to work through the backlog, then the market corrected sharply downward in Oct/Nov/Dec.”

Thanks to our partners at Flatiron Realty Capital and @SundaeHQ for their help with this survey.