The housing market in Washington D.C. is the strongest it has been in years. According to a recent report from the Commerce Department, the robust market is likely to continue for the months to come. Daren Bloomquist, vice president of RealtyTrac, implied that the strong market is a great benefiting house flippers throughout the region.
“D.C. is one of those markets that’s still pretty on fire and that is an advantage to flippers,” Bloomquist said.
State of House Flipping in D.C.
House flipping wasn’t common in the D.C. area until a few years ago. “It seems like house flipping came late to Washington, D.C. It started in Phoenix and in some areas of California first, because prices hit bottom first in those areas. In D.C. there’s been this window of opportunity between low-priced housing stock and really high price appreciation over the past two years,” Nela Richardson, the chief economist at Redfin told WAMU.
However, the booming house market has made the practice much more appealing to investors in the D.C. region. A growing number of investors are making returns over 50% after purchasing and repairing existing houses. RealtyTrac estimates that the average house flipper makes a $107,000 profit from their homes.
Of course, a number of factors play a role in the profitability of house flipping. The zip code the home is located is one of the most influential factors. The most valuable houses that have been flipped are located in the 20743 zip code, which includes parts of Maryland.
Will House Flipping Become More Common in D.C.?
The sudden popularity of house flipping in Washington D.C. is due primarily to the rapidly growing housing market. The National Association of Realtors found that the region is home to one of the fastest growing housing markets in the country. There are a number of factors that appear to be playing a role, but one of them is the growing tech sector. The housing market is likely to grow more quickly as many businesses like website development companies relocate from Silicon Valley to escape costly regulations and taxes.
If the economy maintains its current growth rate, it will continue to propel the D.C. housing market. A growing number of house flippers are expected to invest in properties as they speculate housing prices will continue to rise. In turn, their acquisitions will lift housing prices even further, which may encourage more sellers to list their properties.