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Does return of house flipping mean foreclosure in South FL is back?

The resurgence of house flipping in South Florida could be, ironically, another sign that the worst of the region’s foreclosure crisis is over.

As readers know, house flipping is the act of buying a distressed house or condominium, fixing it up and selling it for a profit. RealtyTrac, which keeps national data on house flipping, defines it as a property that gets sold twice within 12 months.

In normal times, about 7.5 percent of South Florida home sales are flips, according to the South Florida Sun-Sentinel. But in the first quarter of the year, about 10 percent of sales could be considered property flipping, RealtyTrac reports. The total number of flips in the region jumped 9 percent from the previous year.

House flippers tend to target properties that lenders have seized in foreclosure, or ones with homeowners who have fallen behind on their mortgage and are struggling for a solution. So, it would seem that an increase in flips suggests that foreclosures are rising again in South Florida.

But as we have been tracking for months now, the rate of new foreclosures is dropping steadily. Instead, flippers are drawing from a pool of properties that were caught in Florida’s judicial background, but are now finally moving through the process. The lenders that end up owning foreclosed homes are typically eager to sell, often for relatively cheap.

While the trend of house flipping may not indicate that foreclosure is on the rise again, there are still numerous Florida homeowners who will face foreclosure in the coming weeks and months. Homeowners in trouble can turn to a foreclosure defense attorney for help.

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