Flip now if you plan to flip that house at all-Profits are high but the market may be peaking

RealtyTrac, released its year-end and fourth quarter 2013 Home Flipping Report, which shows 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16% from 2012 and up 114% from 2011.
Profits are strong in flipping right now. The average gross profit for a home flip — the difference between the flipped price and the price the flipper purchased the property for — was $58,081 for all U.S. homes flipped in 2013, up from an average gross profit of $45,759 in 2012. The average gross profit for homes flipped in the fourth quarter was $62,761, up from $52,746 in the fourth quarter of 2012.
It looks like the market for flips is slowing, which could portend ill for housing in general. Flips accounted for 3.8% of all sales in the fourth quarter, down slightly from 3.9% of all sales in the third quarter and down from 7.1% of all sales in the fourth quarter of 2012.
"Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase," said Daren Blomquist, vice president of RealtyTrac. "For the year 21% of all properties flipped were purchased out of foreclosure, but that is down from 27% in 2012 and 32% in 2011. Meanwhile flipped homes were still purchased at an average discount of 13% below market value in 2013, the same average discount as 2012, indicating that investors are finding discounted buying opportunities outside of the public foreclosure process — particularly in those markets with the biggest increases in flipping for the year."
RealtyTrac, one of the nation’s leading sources for comprehensive housing data, reported that homes flipped in 2013 accounted for 4.6% of all U.S. single-family home sales during the year, up from 4.2% in 2012 and up from 2.6% in 2011.
Who is flipping? People with lots of extra cash. The report shows the biggest increases in flipping nationwide occurred on homes with a flipped price of $400,000 or more. Although flipping increased across all price ranges, flips on homes with a flipped sale price above $400,000 increased 36% from 2012, while flips on homes with a flipped sale price at or below $400,000 increased 17% from 2012.
Major metro areas with big increases in home flipping in 2013 compared to 2012 included Virginia Beach (up 141%), Jacksonville, Fla., (up 92%), Baltimore, Md. (up 88%), Atlanta (up 79%), Richmond, Va., (up 57%), Washington, D.C. (up 52%) and Detroit (up 51%).
Major markets with big decreases in home flipping in 2013 compared to 2012 included Philadelphia (down 43%), Phoenix (down 32%), Tampa (down 17%), Houston (down 17%), Denver (down 15%), Minneapolis (down 9%), and Sacramento (down 5%).