Friday, June 3, 2005
Flipping in the Hamptons
According to this New York Times story (registration required) as stories about the hot, frothy -- very frothy -- real estate market continue. Flipping really makes sense in a down market when you can purchase properties for a steal but it seems to be working even today with the housing marketing on an almost continuous upward trajectory these last ten years:
The flippers are part of a larger national trend that, even as talk of a housing bubble grows, has a significant number of Americans investing in real estate. A survey conducted by the National Association of Realtors showed that 23 percent of all homes purchased in 2004 were for investment, a jump of 14 percent from the year before. And with home prices rising 15.1 percent in the last year alone across the nation, the Realtors association found that real estate has taken the place of Dow and Nasdaq offerings in many portfolios. "We don't understand the stock market, and this is tangible," said Bruce Karp, a lawyer in Manhattan, who with his partner Stephen Goldstone, began buying Hamptons investment properties nine years ago.
Indeed, while many other resort areas have their share of flippers, the Hamptons, where property values seem to move in only one direction - up - are a particularly fertile area for investment buying. Just as in Manhattan, there's a scarcity of prime properties in desirable locations, which means that bidding wars are common and that prices are outlandish by any rational standard - like nearly $1.5 million for a 1,200-square-foot, three-bedroom cottage in Amagansett.