Looking for a quick $40,000? Consider joining the rapidly growing legion of New York-area home flippers. The average gross profit on a home owned for less than six months and sold in the first half of 2013 in the New York City, Long Island and Northern New Jersey area was $39,458, according to a report released July 19 by real estate analytics firm RealtyTrac.
Based on gross profit percentage (10 percent), RealtyTrac found the local market to be the nation's 14th best for profitable home flipping.
The practice is on the rise across the country. The 136,184 flips in the first half of 2013 is a 19 percent increase on the same period in 2012 and a 74 percent uptick compared to the first half of 2011. Investors using this strategy enjoyed an average gross profit of $18,391, which marks a 9 percent gross return.
Keep in mind, the return investors actually realize is likely far less lucrative. The analysis was based purely on recorded sales prices, and doesn't take other expenses into account, such as taxes, broker fees and home improvement expenses.
Still, 5,485 incidences of house-flipping were recorded in the local market, up 437 percent from the same period a year ago. (Only seven metropolitan statistical areas, all significantly smaller than the New York one, posted a greater increase.) That's likely because the area is still experiencing a lot of foreclosure activity, which RealtyTrac said correlated closely to home flipping as it indicates a greater number of distressed bargains available to investors. As previously noted, New York — and Long Island in particular — remains beset by a large number of foreclosures largely due to the state's extremely slow judicial process. Meanwhile, areas that have already cleared through most of their distressed inventory, including Las Vegas, Phoenix and Southern California, are seeing declines in house-flipping.
See RealtyTrac's chart below for the full list of top 15 markets for home flippers.