ATLANTA, Oct. 31, 2013 /PRNewswire/ -- Hard money lender Lima One Capital released its analysis of recent national foreclosure and home flipping reports. The Atlanta hard money lender observes that the decrease in foreclosures and shadow inventory on a national level has led to increase in home flipping profitability and high-end home flips overall. The findings highlight an exciting developing trend in home flipping and point towards a return to normalcy and stability in the United States housing market.
CoreLogic recently released its third quarter National Foreclosure Report. The report shows a 33% decrease in U.S. foreclosures since August, 2012. In the one-year span, 454,000 fewer homes went into foreclosure than in previous years. CoreLogic also found that shadow inventory dropped to 1.9 million homes this quarter, the lowest level since August, 2008. Shadow inventory is defined as 90 day delinquent properties and properties that are in foreclosure but are unlisted. Foreclosure and shadow inventory levels are important metrics in determining the health of the real estate market.
RealtyTrac recently released its third quarter Home Flipping Report. A home flip is defined as an investment property bought and quickly sold, typically within 4 to 12 months. RealtyTrac observed 32,993 single-family home flips in the third quarter of 2013, a 13% decrease from the previous year. Home-flip profitability increased 12% in the same time period, with gross profit jumping up from $48,893 in 2012 to $54,927 in 2013.
Many of the findings in the RealtyTrac report deal with high-end home flips. In the report, RealtyTrac considers any home-flip projects larger than $750,000 to be high-end. These types of high-end deals increased 34% from 2012 to 2013. The limited availability of medium-sized foreclosure inventory has led to a decrease in overall flipping activity year-over-year. This foreclosure inventory decrease has motivated serious investors to enter the higher-end flip market. High-end home flips are focused predominantly in the major markets, but these large deals can be found throughout the country.
"Here in Atlanta, home flipping remains extremely popular with real estate investors and the emergence of high-end projects only adds to the versatility of this market," states Founder and CEO of Lima One Capital John Warren. "We have funded multiple high-end flips this year. It's truly an incredible experience tracking the progress of these luxury properties. We are able to see them transform into the premier properties in an already highly desirable neighborhood."
Locally, Atlanta avoided the national trend of decreased overall home flipping and saw a 32% increase in home flipping activity between 2012 and 2013. Atlanta posted the highest gain in this category among major real estate markets. Georgia continues to post higher foreclosure inventory than most of the country, but those continue to decrease over time.
The RealtyTrac and CoreLogic reports help to illustrate the improvements seen in the U.S. Real Estate market. Foreclosures and shadow inventory continue to decrease, an indicator of a stabilizing market. The data also points to the ability of real estate investors to adapt and thrive in a changing market. Home flip levels decreased slightly but flip profitability increased and high end flips are becoming more popular among investors. These reports highlight encouraging signs of a recovering real estate market that continues to provide fantastic opportunities for real investors.
Lima One Capital, LLC:
Lima One Capital is a hard money lending company in Atlanta, GA, Greenville, SC, and Charlotte, NC. The company specializes in providing first mortgage loans to real estate investors for the purchase and renovation of residential investment homes. Lima One Capital offers loan lengths of 13 months, 5 years and 6 years. A typical loan is closed within seven days, providing clients with the ability to capitalize on unique opportunities in the real estate market, immediately. Lima One Capital is revolutionizing the industry standard for residential real estate investment lending.
For more information on Lima One Capital, LLC, visit www.limaonecapital.com or call 404-908-0080.
SOURCE Lima One Capital