Realtor.com® analyzed markets where at least 20 flipped homes sold for more than $1 million from January to October 2018.
They defined flip as a home that sold twice for a profit within a year.
The markets seeing some of the largest number of luxury housing flips are in California, particularly the Los Angeles, Long Beach, and Anaheim areas, with the percentage of luxury home flips increasing from 3.4 percent in 2017 to 4 percent in 2018. "It was one of the fastest-growing luxury markets last year overall, so it’s a function of sales being higher and growing at a healthy pace, which can result in flips growing at a healthy pace," Javier Vivas, director of economic research at realtor.com®, told Mansion Global. "The share of inventory above $1 million in Los Angeles is large, too, and above most other markets."
International buyers are targeting the area for flips as well, says Santiago Arana, a broker with The Agency in Los Angeles. "Tech companies are moving in, there’s been a gigantic investment in the new football stadium, George Lucas is opening a new museum, and there is incredible growth and development downtown."
Luxury home flipping in many markets could taper off though this year, too.
Housing analysts point to changes in the U.S. tax code from last year that could make investors more reluctant to take on bigger purchases this year.
“We’re already seeing a lot of that with price reductions and increases in the amount and types of price cuts happening above the $1 million mark.”