North Bay Business Journal

Wednesday, May 29, 2013, 12:30 pm

Share your thoughts: New housing bubble forming?

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    NBBJ Pulse Poll

    Is there a new bubble forming in residential real estate?

    • Yes (57%, 29 votes)
    • No (29%, 15 votes)
    • Don't know (14%, 7 votes)

    Total voters: 51
    Polling period: May 29, 2013 @ 12:00 pm – June 5, 2013 @ 12:00 pm

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    As median home prices climb sharply in the North Bay, a recent report by real estate data tracker RealtyTrac shows that the Santa Rosa-Petaluma market is one of the most profitable nationwide for “flipping” homes.

    The report by the Irvine, Calif.-based firm shows the Santa Rosa-Petaluma Metropolitan Statistical Area as the 18th most profitable market for those who buy, renovate and resell homes, part of a list of the 25 markets where the practice generated the highest rate of return in 2012. …

    Climbing home prices have attracted an array of investors in the current market, with “flipping” being among those practices. …

    The practice has changed from the days when buyers could purchase a distressed property at a deep discount and sell at a profit after basic renovations, Mr. Burke said. While investors were able to put between $10,000 and $30,000 into a property for a profitable sale while the market was at its low, those activities now entail from $30,000 up to as much as $250,000, he said.

    “Now the business has shifted to looking for properties that may need another bedroom, or even a full rebuild of a home,” he said. “It’s basically the homebuilding of this decade. It used to be you buy a property and build 20 homes on it — that was real estate development.” [read more of "Santa Rosa ranked one of most profitable 'flip' markets"]

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