It's a house-flipping haven in the Omaha area and in Nebraska, or says RealtyTrac's midyear 2013 report.
According to a report released Friday by the national tracker of real estate trends, the Omaha-Council Bluffs metropolitan area ranked No. 2 for profitable home-flipping — that is when a home is bought, fixed and sold again within six months.
Among the top 100 metro markets, Omaha came in 14th in the growth of home-flipping the first six months of this year, compared with 2012. That was 329 percent growth, from 621 flips to 2,662, the report said.
Statewide, house-flipping in Nebraska rose 262 percent and, in Iowa, 36 percent.
Nebraska and Omaha results surprised Daren Blomquist, vice president of RealtyTrac.
“You don't think of middle America cities as having the markets conducive to flipping,” said Blomquist, adding that flipping meccas typically have rapidly increasing home prices and homebuilding and dramatic population shifts.
However, Blomquist said that the Omaha-Bluffs metro had a 15 percent increase in foreclosure activity in 2012 over 2011, providing more distressed properties from which investors could choose.
“Flippers in the Omaha area are making a very strong profit,” Blomquist said, noting that the average gross profit (not counting remodeling investments to the property) was about $85,000. That represents a 56 percent return on the initial purchase price of the home, he said.
Marty Evans of CBSHome Real Estate has engaged in flipping himself and said he has seen more competition. “All the HGTV flipping shows have piqued people's interest,” he said.
Lisa Ritter, owner of Re/Max Results, said the relatively high profit margin for flipping in Omaha may be due to a conservative nature of residents. “People don't spend a ton of money on their homes to glam it up. So it's a perfect environment for an investor to come in, get it cheap, make it pretty and make a high profit.”
At the state level, investors who flipped homes in Nebraska saw an average 62 percent gross profit, the highest among states. Iowa had negative 1 percent.
Blomquist said home-flipping says both good and not-so-good things about a community.
“It's a sign the housing market is doing well and prices are appreciating if you're attracting these speculators.”
Of the “dark side,” Blomquist said: “If you see that happening in too much volume, it could create the type of housing bubble we saw earlier in the 2000s. Flipping was one of the elements that led to homes being overpriced and overinflated in value.”