Source: KSL —
SALT LAKE CITY — The U.S. housing market has turned, and it’s starting to backfire on home flippers.
Mortgage rates are now hovering around 7%, further straining housing affordability and pricing buyers out of the market. Meanwhile inflation continues to pressurize labor costs, sending home building and renovations skyward. Home prices are starting to dip as sellers recalibrate their listing prices for falling demand, and even though inventory is starting to boost, it’s still lingering at low levels.
That’s a recipe for disaster for home flippers.
What’s happening: While experienced flippers are starting to pull back, Bruce Bartlett, a veteran real-estate investor and home flipper, told Fortune he fears the shifting market will “cull the herd” of rookie flippers that only entered the market in the last few years as home prices skyrocketed and as HGTV home flipping shows have gained popularity.
“It’s not all roses. If you’re inexperienced, it will be very difficult,” Bartlett told Fortune. “For the last 15 years we’ve been in a low interest rate environment, and it will be challenging for everyone to recalculate. This is going to cull the herd. Lesser flippers are going to leave the business.”
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