Friday, December 08, 2006

Flippers In Trouble FAQ

What is a Flipper In Trouble?
A Flipper In Trouble (FIT) as defined on this site, is somebody who bought a house within the last two years and is selling it now for less than what they paid.

Where does the data come from?
I take current listing prices and compare them to previous sales data.

I found an FIT that you don’t list. Why didn’t you catch it?

The process I used to gather the listings is automated, and some filtering is done to make sure the listings are accurate. The goal is not to catch every FIT, but to provide accurate, provable listings.

A listing on your site is not really an FIT. How did this happen?
Although every effort is made to filter out errors, there are some mistakes in the data (split lots, county record errors etc), that are difficult to catch. If you find one like that, let me know and I’ll make every effort to remove it.

Why are you doing this?
The primary purpose of this site is to counter the positive spin the real estate industry puts on real estate investment. This site provides concrete examples of serious real estate investment mistakes. Hopefully, it will dissuade others from following the same path to ruin.

46 comments :

Bob Shallit said...

I just heard about your blog and would like to mention it in my column in the Bee. Could you call me at 916-321-1049 and provide a bit more information.
Thanks,
Bob Shallit

Anonymous said...

Great site thanks for doing this. I know it's a lot of work so if you need help putting this together let me know how to reach you and what I can do to help. Thanks.

Anonymous said...

Yes, we have a slow market now, just exactly like past cycles. Buyers are holding back which is causing a slow-down...but also a demand build-up. HELLO...guess what's going to happen in the future? Bottom line: real estate is like the stock market, both are GREAT long-term investments.

Anonymous said...

Thank you for an excellent site. This area is in dire need of a reality check. Some people still think that if you cross your fingers, or ignore the basic rules of economics, you will be able to get rich quick. Sacramento prices will continue to recede, and we will be in an economic rut for years to come. Auctioning properties will become the norm, and there will be bargains galore. To compare this with past cycles is ludicrous. We are in uncharted territory.

Anonymous said...

I understand how you can get the currently sale price from MLS, but how do you get the previous sales data?

Anonymous said...

Do you also track this data for properties in Placer County?

Anonymous said...

This i a great site, could you also get listings
in el dordo co?
thx

Anonymous said...

Thanks for developing this site. The information you provide appears to give a much more realistic picture of the trend in market values than does the "change in median price", which is virtually worthless, but which seem to be quoted in every article about the Sacramento area housing market.

Anonymous said...

I don't get it. Waht's the purpose of this site. I know you are trying to highlight that real estate price fluctuate, now on a decline. I assume you are in the real estate business .... why else would anyone care or spend the time to create a list like this?

Lee said...

This is one of the best sites I have ever seen. I have been checking it for 6 months. Thanks for not making it a pay site. I plan on making a donation using the PayPal button on your site.

Anonymous said...

Why create such a site?
a) Ad revenue
b) Showing RE investment mistakes helps accentuate the down trend, chances are the creator of this site is a flipper (him|her)self, the new idea here is to probably help prices go back down quicker than the usual cycle (like the flips helped get the prices up faster than the usual cycle). Once prices are low enough, wait for stagnation to be over, then flip again.

I do not see why anyone would bother otherwise. It's amazing to see how many blogs were preaching flips before, and how many are decrying them now.

Anonymous said...

It's the Eastern part of Ca. The Appalachian Region west of the Mississippi. The cycle will take years to play out. The money flowed from the Bay area and the South to the Valleys of Ca. and the thing is nobody comes to these regions because they want to; they come here because they have no choice. They have been transfered or the housing is cheep and they can't afford the prices in the desirable areas. Once they get here they realize how bad it is and they leave. The people left over to buy these houses don't have the money. The economies of the Eastern Ca. Valleys are based on agriculture and the poverty runs deep. Most of the counties here sport populations where 60% of them are on government assistance. 60% !!! True unemployment is usually 14 - 17%. And the average household income is 25% below National average. Combine that with most of the new jobs created here are in the home construction industries and you have a recipe for disaster.

I do have good news though . . . the ag land was $9,000 to $10,000 per acre in 1980 and it still is $9,000 to $10,000 per acre in 2007!

Guy Daley said...

I also want to add my thanks. This material is somewhat buried but once found and polished its a gem. Its a source of wonderment and astonishment and a piece of the larger puzzle. Just who are these people that gamble on such expensive assets? They've just rolled snakeeyes. Easy come, easy go?

Anonymous said...

I love this site! We attended one of those "Teach Me Foreclosure" workshops yesterday and thought I learned a little something. I stumble across your site this morning and "VIOLA" I am educated! Thanks for steering me away from the "garden path"

Anonymous said...

Just another one to say say - Great job! and very well done.
As a previous poster said, the inner valleys are places of nearly last resort - as a soon-to-be-ex SF'er (poverty), Sacto area is looking positively wonderful given my limited choices - as much as I suspect many of the more spectacular flameouts are more fraud than real estate de-valuation, it is still incredible.
Thanks again!

ukhousingbubble said...

I wish we had a site like this in the UK.

charles said...

I just found your site a few weeks ago and I am amazed. I will definately follow it for the next 5 years as real estate slowly comes in line with historical values once again. This downturn will be much worse than 1990. Thanks for documenting it. Also I want to make a donation.

Anonymous said...

Too bad this site isn't national. I'm sick of the glut of house-flipping shows on TV that give the impression that this is easy money. Even though a few programs - such as Property Ladder - aren't afraid to show ill-prepared people falling on their face, most of them encourage this behavior.

Also, these episodes were taped last year or two years ago, before the bubble burst. But most viewers don't reason that through.

Anonymous said...

This site is a good start, but having lived in the areas where renters are constantly victimized by parasitic speculators for the last decade, I won't feel like things are even until vigilante violence is carried out against these scumbags. Having them go broke is just not enough for me, I want to see some broken legs.

Anonymous said...

I was one of those "scum" landloards. It took me 9 months to get rid of one my tennents. I sold at the top and would do it again and again. Too bad!!!

Anonymous said...

Couldn't a lot of these people just be purchasers from before the peak, who move sideways within the market?

If you're not a first time buyer, being up a 100% or down 50% makes no difference, wherever you're moving to is also up 100% or down 50%... (provided you're not changing cities)

Isn't that the whole point of home ownership, to lock in the cost of living in old dollars, so that you don't have to stress about cost of living in subsequent boom/bust cycles?

EbenVisher said...

The Google Maps links are invaluable! Please keep them as a part of the site.

lmageno@capitol-llc.com said...

I think this is a great market and feel bad for the folks who over extended their financial capacity. This is the best possible environment for those who didn't buy into the frenzy and now have some buying power at the low end of the cycle. This happens every 6-8 years give or take and should not be a surprise. If you buy now and can and hold for the cycle to return as long as needed you will be fine. I think the site is brutal for the people who have gossip loving neighbors but an awesome resource for the long term investor. I think a focus on any multi dwelling properties or commercial real estate in trouble would boost hits to the site. I look forward to Bob's thoughts. By the way I think "Anonymous" sure has a lot to say on this site.

Anonymous said...

I can't fathom that this property really flipped in 10 month's for a $335,000 profit..

But, if it's true... you should get together with the FBI since your site is a great resource to identify mortgage fraud... you could charge them a pretty penny too ...

Previous Sales:
Sold on 2004-07-30 for $450,000
Sold on 2005-05-16 for $785,000
MLS# 70099909

Tim Hennigar said...

Here in Alberta Canada, we are experiencing a mild correction. I look south for the extreme example of people looking for unrealistically high returns for no effort. This Realtor has spent many hours trying to talk my clients out of "investing", because everybody else is doing it. Need I say more..

Anonymous said...

>> Buyers are holding back which is causing a slow-down...but also a demand build-up.

Not necessarily! the clue lies in the word "flipper" - the point of thisblog is to show that how inflated asset prices are connected to speculative activity.

The absence of flippers might account for a large drop in demand. A durable bottom will form when cashflow investors return to the market, and demand will return. `

Anonymous said...

Love the site. Just a few comments: I live in phx (12 yrs) if you can look at data from 04 thats whn the frenzy really began..prices were already almost doubled by 05. actually it was a staight climb up since 95. I sold in 05 pd cap gains tax pocketed $220(after paying the corrupt realtor)on a house I pd 70 for,bought a trailor and traveled for 2 yrs,as many are doing. I just bought another house in phx. and set my price at pre-05 prices. I am happy having a place to call home that is safe and was reasonable.

Anonymous said...

Awesome site. I know you're probably limited to what you can do with your site, since it's powered by Blogger. However, if you could add a sort by % loss, I would love it!

Anonymous said...

Great site
See News about Countrywide from BBC UK.


Mortgage giant denies bankruptcy

Countrywide reported losses of $1.2bn in October
US mortgage giant Countrywide Financial has denied speculation it is set to file for bankruptcy protection.
Countrywide made the statement after shares in America's largest mortgage lender fell as much as 25% in Tuesday trading on Wall Street.

The shares recovered some ground after the firm's comments, but still ended the day down 21% at $7.84.

Countrywide reported a $1.2bn (£584m) loss in October, hit by the sharp downturn in the US housing market.

'No substance'

In its statement, the company said there was "no substance to the rumour that Countrywide is planning to file for bankruptcy".

Countrywide is severely challenged and might falter if it does not receive an infusion of at least $4bn within the next couple of weeks

Credit rating agency Egan-Jones Ratings

It added: "And we are not aware of any basis for the rumour that any of the major rating agencies are contemplating negative action relative to the company."

Yet while Countrywide says its finances are in good shape, some analysts are not so sure.

Credit rating agency Egan-Jones Ratings told the Reuters news agency that Countrywide "is severely challenged and might falter if it does not receive an infusion of at least $4bn within the next couple of weeks".

The US housing market has contracted sharply over the past year in the face of higher mortgage rates, which have led to record mortgage default levels, particularly in the sub-prime sector.

The result has been falling house prices, and increasing numbers of Americans either unwilling or unable to join the housing market.

Anonymous said...

Is there an option I'm missing on the site to search by a specific region or zip code? That would be SO helpful! Love the site though. Thanks for compiling the data!

Curtis said...

Is it possible to map all of the properties you identified on one google map? It would be interesting to see the concentration of where flippers are in trouble.

Anonymous said...

I've heard of entire communities that are almost completely vacant and resemble ghost towns. I will be in the Vegas area next week and wouldn't mind driving just to see what it's like. Are there any specific places in Vegas that you or other posters could point me to? Thanks.

Anonymous said...

Excellent information, Greed is a powerful force of human nature. I am in the market as a "normal" person trying to sell a home I've owned for some time in order to upgrade a bit. The "flippers" have caused such an unstable market few "normal" people are successful in selling and buying. Again I see talk of "taking advantage" of the down market and "investors" are busy buying up forclosures and short sales...here we go again. Why are they "flippers" now but were "investors" back then or vice a versa? They would eat their young for a profit. What a country!

Anonymous said...

Great site - would love it if you could search by city, or even better, zip code??
Thanks-
Brett

Tim said...

Good Job! :)

Marty M. said...

You should never borrow money. You can borrow things like a cup of sugar, or a shovel. But, you should never borrow money.

100 years ago, 90% of the houses were bought without taking out a loan.

Anonymous said...

Gosh, just noticed my house here! So which am I: flipper or poor mortgage choice? Neither. I pay off substantial add'l principal every month on a mortgage significantly smaller than legit mortgage providers were willing to provide and put 30% down. I'd hoped to live there for 10+ years, but ended up in a completely unanticipated transfer situation. Things happen...

dotLaunch said...

Are the properties on this site ones that were purchased/sold strictly by "flippers"? - meaning investments only, or could they be regular purchasers who lost their home within a couple of years?

Ryan said...

You only recently started posting
the REO flag.
Why is this now happening?
I have read where the foreclosure process has been deliberately drawn out,keeping shadow inventory,and OFF the Banks' books.
Is there now a change happening?
How do you identify this as REO?
Is it from the listing service?
Regards

Anonymous said...

My house is on here and we are not "in trouble" or poor decision makers when it comes to our finances. What we are is a dual military couple who planned on retiring here but we are being transfered to another state for duty. We also have made additional payments toward the principal on our home and have put significant money into our house.

Anonymous said...

1/14/2010 --- I am a visitor to and fan of this site. I just read the comments for the first time. One note, if you overpaid for a house (with no flipping intent), I would not be crowing about how wise you are with money. Be grateful that your house debt was in Arizona, with no deficiency judgments available.

Also, to the military poster, how in the world are duty transfers for active military members unanticipated? I do not work for a large company or the federal government. For professional licensing reasons, it would be quite complicated for me to leave Arizona. But even I would never borrow a ton to buy a house and reduce my economic flexibility.

I bought one house years ago, borrowed $80K, and even that made me nervous.

wtf? said...

I really enjoyed seeing my house on your blog and being refereed to as a "flipper". The house on D Street was in my family since 1968, I assumed ownership in 1981. I was married in that house, had two children and raised them there through high school, cared for my Mother there while she died from cancer, and had to short sell the house as a result of disability; unable to work for over a year. And that makes me a "flipper"?
You're just trying to scapegoat the R.E. and Financial industry's involvement in the housing crash. Won't work. Who are you going to blame the next crash on in the coming months while the lesser gods are doing the same thing they did to cause the last crash? Have fun:)

davers said...

@ wtf? :

How on earth was the house in your family since 1968 and was never paid off?

Even if it was transfered into your name and you paid for it, shouldnt you have either paid off the mortgage or been really close to paying it off? I think you took out equity loans on the thing. A house is not an ATM.

The idea of a mortgage is to pay it off, not prolong it as long as possible. Buying in 1981 should leave you with a clear title house by now, not something you have to short sell.

DataGal said...

Looks like it could be a great site but it's missing some sales data which makes the information unreliable. I personally have a house that has been on the market for less than 10 days. I purchased it two years ago, however the site shows the last purchase was when the bank took it back from the previous owner 3 years ago and also shows it has been listed for over 1000 days. I wouldn't put too much stock in the numbers. :( I have been in the real estate data industry for almost 20 years, so I know it is possible to get accurate data.

Anonymous said...

Just bought the listing at 3092 Latham, EDH for $240,000 (less than half it's $500,000 2006 price)
Just by luck of circumstance, I sold my last house in Rancho Murieta in 2005 when prices were high. Now after renting for 6 years, serendipitously getting in low. I no longer view home ownership as an investment, however. Thanks for your blog.

Jim

Anonymous said...

I notice that many sales are duplicated on the same day,same price.Is this a scam to goose the market,or is someone getting commissions for two sales or what?
Don't understand this....
Looks very dodgy.