House flipping seems to be pandemic-proof career
CHICAGO — Born from the burgeoning real estate market that preceded the Great Recession, flipping homes has become a national fascination over the past two decades. Thrifty bargain hunters scooped up foreclosed or decrepit properties, renovated them and quickly resold for a tidy profit.
The good news for those who have made a career out of the practice: It seems, at least for the time being, that house flipping has proven relatively pandemic-proof.
“My business has been surprisingly unaffected,” said Andy Goldman, whose family has been in the house-flipping business since the 1980s.
In the first three months of 2020, 7.5% of homes sold in the United States were flipped, according to a June report from real estate research firm ATTOM Data Solutions. That’s the highest rate since 2006 and a jump from 6.3% at the end of 2019.
Still, it’s too soon to fully grasp how the coronavirus pandemic will impact the house flipping market through 2020 and beyond, ATTOM chief product officer Todd Teta said in a statement.
“Profits are down and are lower than they’ve been since the dark days following the Great Recession,” Teta said. “Enter now the coronavirus pandemic, and the prospects for house flipping are notably uncertain, at least in the short term.”
The coming months will be key in determining whether home prices will plummet, harming investors, or remain steady, Teta said. And as COVID-19 cases ebb and flow, it’s impossible to know what’s next.
As a whole, the real estate market rebounded quickly as the country began loosening COVID-19 restrictions, and consumers resumed buying and selling. With markedly low interest rates, buyers were unwilling to put off their search for long, and sellers are frequently getting multiple offers above asking price, agents said.
Social distancing is also easy to manage when flipping homes, which typically involves vacant properties that can be renovated in relative isolation. Plus, contractors working on homes already have the necessary gear.
“In general, they’re wearing masks,” said Chicago house flipper Anton
Downing. “N95 masks are standard anyway.”
Downing and his brother, Anthony Downing, who star in the DIY channel house flipping show “Double Down,” have done well this year, despite the pandemic, they said.
“We’ve definitely been doing consultations,” Anthony Downing said. “We’ve been on-site for plenty of renovations.”
It has been easier to adjust to the pandemic than to the Great Recession, in part because of changes made to banking practices following the recession, Anton Downing said.
“This pandemic is much different than 2008, because we didn’t have a landslide inside of a 12month period,” he said. “Things are stable now that banks are prepared.”
There have been changes to adapt to; showing homes to potential buyers is difficult when the state imposed restrictions on open houses and showings of occupied homes.
Real estate agents have ramped up virtual tour offerings, while curbside closings on homes are making it easier to complete the home buying process safely.