Peak House Flipping?
Jack Davis | Feb 10, 2017 11:39
Originally published by Chamber of Merchants
While I try to watch as little TV as possible, one of my favorite past times has been watching the house buying/flipping shows. So while browsing the guide a few weeks back I made a list of all them, all on the same channel – dedicated to this stuff. Can you believe there are 26 TV shows about buying houses! And that’s just the beginning because there are another 25+ shows which I did not see on this channel. Another sign of a market top?
Here are some of them:
First Time Flippers
Flip or Flop
House Hunters
House Hunters Renovation
House Hunters off the Grid
House Hunters International
Tiny House Hunters
Flipping Out
Tiny Luxury
A Sale of 2 Cities
Million Dollar Listing
Zombie House Flipping
Flip This House
Texas Flip and Move
Vacation House for Free
Masters of Flip
Beach Front Bargain Hunt
Rehab Addict
Tiny Houses
Flip and Move
Listed Sisters
Hunting Vintage
Hawaii Life
Nashville Flipped
Fixer Upper
The Block
In 2016, national flipping activity increased for the first time in three years. Flipped homes made up 6.1% of all home sales last year, up from 5.3% in 2015. This is the highest level we’ve seen since 2006 when flips were at 7.3%. Furthermore, flipping activity in 2016 was the third highest since 2000 and the jump between 2015 and 2016 was the second largest increase since that year.
Why is flipping activity picking up again? While it’s tough to single out one particular cause, rapidly rising home prices have likely played a major role. Home price gains in 2016 were the most since 2006, and prices in many markets are now back to their pre-recession peaks.
Data taken from Trulia
h2 Google (NASDAQ:GOOGL) Trends/h2
Google Trends is a good indicator of what people are searching for. I found this one quite interesting.
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1st chart is the search term “House Flipping” from 2004-present in the United States. Not a big surprise…
Lets move over to the Australian market. Same search parameters. Clearly those house flipping shows are having an impact on the behavior of people, at least in Australia.
h3 Numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. Likewise a score of 0 means the term was less than 1% as popular as the peak./h3
h2 The Takeaway/h2
According to the ABS, Australia has over 1 million people employed in the construction field (8.9% of the workforce), which is the 3rd highest after retail workers and health care workers. That is a large population directly involved in the construction industry, and when that trend starts to reverse – and it eventually will – that is going to be a lot of unemployed tradies. Just how many Aussies are house flipping is hard to tell, but the growth in the house flipping TV shows historically shows it is near a peak.
This is also evident in the amount the average tradie earns per hour. According to Service Seeking the average plumber charges $78.40 an hour and the average electrician charges $74.61 an hour. Thats $156,000-$164,000 per year. According to Payscale.com the median wage for an Emergency Room Doctor is $101,000. Bubble territory in wages?!
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