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The number of homes flipped in the third quarter of 2015 was 19 percent lower than it was in the same quarter of 2014, real estate data company RealtyTrac reported Thursday.
Tucson and San Diego had the biggest year-over-year drop in the U.S.
The large drop in Tucson's market was caused by the interaction of positive and negative phenomena.
“If we look at the third-quarter foreclosure activity numbers, they’re actually down 40 percent from a year ago,” said RealtyTrac's Ginny Walker.
Fewer foreclosures is good news for overall market health, but bad news for home flippers who use below-market-value homes to turn a profit.
“What happens is these flippers aren’t going to take the time to buy a house that’s not distressed, put money into it and flip it,” said Walker.
Flippers can make up for a lack of distressed homes if a market's home value appreciation rate is high enough, but that is not the case in Tucson, where according to Walker, home prices are going up at a below-average rate.
Slow home appreciation and a lack of homes for sale at below-market value are leading to a drop in return for home flippers, keeping them out of the Tucson market.
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