A growing number of U.S. homebuyers are flipping luxury homes, rather than properties in the middle of the market, the Wall Street Journal reported.
Flips of homes priced $1 million or more jumped 35 percent in 2012 from 2011 numbers, according to market researcher RealtyTrac.
Though these high-end homes make up less than 1 percent of all flips, some metro areas have seen a more than sevenfold increase in million-dollar flips over the last year.
“Investors have actually run out of inventory on the low end of flips, and now they’re moving to the higher end,” Daren Blomquist, vice president of RealtyTrac told the Journal.
Foreign buyers, institutional investors and professionals who have made money in other industries are some of the new players.
New York City, with its high concentration of luxury homes, could be an ideal market for high-end flipping, though the trend is gaining the most traction in markets hit hardest by the economic downturn. Investors can nab big discounts in such areas, many of which now enjoy some of the country’s highest home-appreciation rates. [WSJ] –Julie Strickland