This ‘red flag’ should scare amateur home flippers

Marktetwatch reports:

Those dreaming of flipping a home for a pile of loot better proceed with caution.

The time it takes a home flipper to rehab, list and sell a home now averages six months — an eight-year high, according to a report released by RealtyTrac in August.

“That is a red flag that indicates it’s getting harder for flippers to get their product sold in this market,” explains Daren Blomquist, the vice president of RealtyTrac.

Furthermore, the fact that there are fewer foreclosure deals — in addition to those longer flipping times — means that home flippers are getting squeezed both on the buy side and the sell side, he adds. Indeed, of the more than 30,000 single-family homes flipped in the second quarter of this year, just 41% were acquired while the home was in some stage of foreclosure, down from 44.7% in the same quarter last year and from roughly 70% in the first quarter of 2010, when it was at its peak. This puts the share of flips acquired in foreclosure at a 7.5-year low.

Just a reminder.