Housing Bubble 2.0 Edition

Interesting data to ponder upon…..as we look to see where the housing market goes.

Housing Bubble 2.0 Edition: "25 Markets Where Flipping Homes Is Most Profitable"

Submitted by Tyler Durden on 05/02/2013

Tuesday's Case Shiller update index showed something very troubling: as a whole, the US housing market in its broadest sense, has barely budged in the past four years (chart). And yet, what is unmistakable, and what has given many the impression that there is a "recovery" (despite clear recent signals to the contrary) are media attempts to spark a buying frenzy in several of the key markets that were responsible for the prior housing bubble, such as Florida, California, Nevada and Arizona. And how do we know they are succeeding, if only until the Bernanke liquidity bubble pops again? Courtesy of articles such as this: "25 markets where flipping homes is most profitable." Nuff said.

The full-blown bubble may not be here, but what is worse is that the bubble is certainly raging in key "liquidity-pocket" MSAs, even as various other regions continue to drag the overall housing market ever lower. 

Which makes sense: in an America in which everything is increasingly polarized into two camps, and where even the Fed is schizophrenic about the future of the country, it is only logical that a New Normal housing bubble rages even as the overall housing market continues to tank.

Finally, it is quite obvious that none of these "homes" are being bought as homes, and all are basically speculative momentum chasing instruments, where everyone is certain a greater fool idiot will step up and buy the flip. And yes, we have seen all of this before and it ended in tears.

From RealtyTrac, as advice for those who just can't wait to flip that house:

Flipping  homes — buying, rehabbing and reselling for a profit usually within about 90  days — will likely become more favorable for investors in 2013 as home prices  are expected to continue climbing. And while buying  homes as rentals still offers a solid rate of return in many markets, even  buy-and-hold investors typically flip properties periodically to fund their ongoing  rental purchases.

RealtyTrac  selected the top 25 markets nationwide where flipping single family homes  offers the highest rate of return based on the flipper’s gross profit — the  difference between average original purchased price and the eventual flipped  sales price of a flipped home.