As the curtain rises in 2024, let's talk about what's happening in real estate investment, especially if you're into fix-and-flip projects. There's a good vibe around, with a cautious yet optimistic feel for what's ahead, particularly for house flippers.
At the tail end of last year, you might have noticed that mortgage rates took a nice dip—a 100+ basis point decline in mortgage rates, sparking an uptick in market activity. That's not just good news—it's a green light for many real estate investors. It means more activity in the market and, yes, more opportunities to snag and flip properties, even if it's amidst competition and limited inventory challenges.
That drop in mortgage rates? It's like a welcome sign for folks looking to buy their first home. In a recent Q&A with Inside Mortgage Finance, Arvind Mohan, CEO of Kiavi, shared that entry-level homebuyers account for the vast majority (52%) of flipped home sales.
With the rates coming down from their peak, these buyers are jumping back into the game, eager for homes they can move into right away. This shift is stirring up the market—there's a noticeable buzz and more activity, which is excellent news for you if you're focusing on fix-and-flip projects.
The big puzzle in 2024? Snagging new properties when there just aren't enough to go around. Finding new properties is the major hurdle for flippers, thanks to a tight squeeze on housing stock. And to paint a picture of how tight we're talking, Freddie Mac pointed out back in 2021 that we were short by about 3.8 million units—a gap that's still leaving its mark on finding good investment spots in 2024.
Standing out is key when you're up against the big players, like large homebuilders. You've got a shot by focusing on homes that bring something special to the table. Think about those cozy spots in well-loved neighborhoods or places that pack a punch with their history or unique character—something the brand-new builds just can't match.
The fix-and-flip scene in 2024 is buzzing with chances for the taking, all thanks to more favorable mortgage rates and a resurgence of entry-level homebuyers hitting the scene. But, the fix-and-flip market has a 'cautiously optimistic' vibe for 2024.
Making a mark this year is all about playing it smart, from securing efficient financing to nailing the kind of rehabs that buyers are hunting for. Stay sharp, be ready to pivot, and keep your eye on adding real value. For those prepared to dive in, understand the game, and roll with the punches, 2024's twists and turns can turn into big wins in your fix-and-flip journey.