Arizona Real Estate Market
Phoenix Flippers Cashing In As U.S. Recovery Begins
Foreclosures started steadily falling last year, and lenders began moving to sell the homes they had already taken back and close short sales.
Here are some recent examples culled from Phoenix market reports this month:
An east Phoenix home bought through a short sale for $218,000 in September 2011 sold in late February for $560,000. The home was remodeled, but the price was still an eye-popping 156% more than the investor paid.
A home in Chandler, built in 2005, sold through a short sale in November for $255,000 and was then flipped by an investor for $410,000 in March - a 61% profit in five months.
A foreclosure home in central Glendale was bought for $131,000 in January and flipped in mid-April for $243,000, an 85% jump. The investor added stainless-steel appliances and replastered the swimming pool at the ranch-style home.
In Goodyear, a 2,000-square-foot home in the Estrella Vista community was purchased from the lender for $88,000 in January. The investor repainted the home, put in new carpet and resold it for $188,000 in mid-April for a 113% gain.
A house in the north Scottsdale golf community of Troon Village sold at auction in December 2011 for $628,000. The buyer flipped the property in March for $850,000. The original owner had paid $771,500 for the 4,000-square-foot upscale home with three bedrooms, four bathrooms and a negative-edge pool back in 2007.
"There are hundreds of recent examples of foreclosure or short-sale homes that have sold to investors who have been able to resell them quickly for much higher prices," said Tom Ruff, managing director of AZ Bidder, a Phoenix-based online foreclosure-auction firm.
Part of the reason for the U.S. upturn, which is not just being seen in Phoenix, is lending rates. Fannie Mae and Freddie Mac report that May 2012 set the all-time record for the lowest interest rates ever for both the 30 year fixed rate mortgage and the 15 year fixed rate mortgage. A 30 year loan is 3.78% while the 15 year has fallen to just 3.04%