Home flipping waned last year in Palm Beach County as the supply of cheap fixer-uppers dwindled and rising prices cut into profit potential.

Flipping, which attracted hordes of novice investors during the real estate boom and spawned popular TV shows, was down 14 percent in 2013 compared to the previous year with 949 Palm Beach County homes being flipped, according to a year-end report from housing analysts at RealtyTrac.

Statewide, home flips — defined as when a property is purchased and sold again within six months — were up 19 percent with Jacksonville seeing one of the biggest increases nationwide among metro areas as flipping jumped 92 percent.

At the same time, Tampa experienced one of the highest decreases nationwide with 17 percent fewer homes being flipped in 2013.

“Profit margins are a lot thinner than they were six months ago,” said Mike Mondelli, president of the Delray Beach-based company Flip Homes Today. “I can find distressed properties, but investors are trying to flip them for too much money.”

RealtyTrac’s flipping data goes back to the beginning of 2011, the same year many economists believe Florida’s home prices hit bottom. It shows home flipping peaked in Palm Beach County during the fourth quarter of 2012 when 8 percent of sales were flips.

In 2013, nearly 5 percent of all Palm Beach County sales were flips, RealtyTrac found. The average gross profit made on a flip was $67,265, up from $50,065 in 2012.

Palm Beach County’s decrease in flipping coincides with an increase in median home prices. December’s median sales price for a single-family home was $265,000, tying the year’s peak price in April. The median price for a condominium in December was $120,750, up 22 percent from the previous year.

“I advise people who don’t have a lot of experience in this business to proceed with caution,” said Jared Dalto, a Realtor with the Palm Beach Group at Seawinds Realty. “If you’re not careful, you can lose your shirt on one deal.”

Mondelli said he needs to buy 30 percent to 40 percent below market value to make any money on a home flip after renovation.

“Banks are holding out for higher prices because there are so many investors flooding the market,” Mondelli said.

Today’s flippers aren’t the speculative buyers of eight years ago who came in with high-risk mortgages and left a trail of foreclosures behind them. Cash carries the real buying power now unless the home is considered a buyer’s primary residence.

Half of the homes sold in Palm Beach County in December were cash deals. Nearly 72 percent of condo sales were conducted in cash.

But what’s happening to the flipping market is more complicated than just rising prices. The influx of Wall Street investors and billion-dollar hedge funds intent on buying and renting has taken inventory off the market long-term.

Banks are also wary of flipping, requiring some buyers to hold a house for at least three months before re-selling.

Mortgages too can be a wild card. If a buyer’s bank won’t appraise a flipped home at the asking price, the flipper could be out money.

“They may have to get used to holding a property a little longer,” Dalto said. “They’ll need deeper pockets.”

Mondelli said he was offered a chance to bid on about 120 South Florida homes recently offered for sale by Dalland Properties, LP. Property records show the Fort Lauderdale-based company started buying in Palm Beach County in 2011 and now owns more than 150 houses. He was interested in six of Dalland’s homes.

“I made an offer I thought they couldn’t refuse, but they refused it,” Mondelli said.

24 thoughts on “Palm Beach County home flips subside”

  1. I was wondering if you ever thought of changing the
    structure of your blog? Its very well written; I love what youve got to say.
    But maybe you could a little more in the way of content so people could connect with
    it better. Youve got an awful lot of text for only having one or two pictures.
    Maybe you could space it out better?

  2. It’s the best time to make a few plans for the future and it is time to be happy.
    I have learn this publish and if I may just I wish to suggest
    you some fascinating things or suggestions. Perhaps you could write subsequent articles relating to this article.
    I wish to learn more issues approximately it!

    My web page :: Royal CBD

  3. If you’re a novice to online trading currency or need to learn new foreign currency trading strategies,
    you might want to consider buying a forex training program or subscribing to a
    sign service. Due on the market’s volatility, a lot of will be investors were
    skeptical about investing their cash within this sort of market.
    Note that this profits and losses might be bigger than your initial margin deposits.

  4. Excellent blog you have here but I was curious about if you knew of
    any user discussion forums that cover the same topics talked about here?

    I’d really like to be a part of online community where I can get feedback from
    other experienced individuals that share the same interest.
    If you have any recommendations, please let me know. Cheers!

  5. May I simply just say what a relief to discover someone that genuinely knows what they are talking about over the internet.
    You definitely realize how to bring a problem to light and make it important.

    A lot more people should look at this and understand
    this side of your story. I was surprised you’re not more popular
    since you definitely have the gift.

  6. An outstanding share! I’ve just forwarded this onto a coworker who had been doing a little research on this.
    And he actually bought me lunch simply because I found it for him…

    lol. So let me reword this…. Thank YOU for the meal!!
    But yeah, thanx for spending the time to discuss this issue here on your web page.

  7. It’s really a great and helpful piece of info. I’m happy that
    you shared this helpful information with us. Please stay us up to date like this.
    Thanks for sharing.

  8. Appreciating the time and effort you put into your blog and in depth information you
    present. It’s nice to come across a blog every
    once in a while that isn’t the same outdated rehashed
    information. Fantastic read! I’ve saved your site and
    I’m including your RSS feeds to my Google account.

  9. I needed to thank you for this good read!! I certainly enjoyed every little bit of it.
    I have you book marked to look at new things you post…

  10. I like the valuable info you provide on your articles. I will bookmark
    your weblog and test again here frequently. I’m
    quite sure I’ll learn many new stuff right right here! Good luck for the following!

  11. Hi I am so happy I found your weblog, I really found you
    by accident, while I was looking on Digg for something else, Anyhow I am here now and would
    just like to say many thanks for a incredible post and a all
    round interesting blog (I also love the theme/design), I
    don’t have time to browse it all at the minute but I have book-marked it and also included your RSS feeds, so when I have time I will
    be back to read much more, Please do keep up the great jo.

Comments are closed.