By Neil Resto
Aerospace Valley, California
The term "flippers" refers to real estate investors who buy properties with the intention of quickly reselling them for a profit. Flippers play a significant role in the housing market, as they can drive up prices and create volatility in local housing markets.
One way in which flippers operate is through the use of trade networks. Trade networks are groups of individuals or businesses that work together to buy and sell goods or services. In the context of real estate, trade networks can consist of real estate agents, mortgage brokers, and other professionals who work together to identify properties that are likely to be profitable for flippers.
Flippers can use trade networks to reach beyond their local area and find properties that are undervalued or in need of renovation. For example, a flipper in California may use their trade network to identify a property in Florida that is undervalued due to a depressed local housing market. The flipper can then use their network to quickly purchase the property and begin renovations, with the intention of reselling the property for a profit.
However, the use of trade networks by flippers can also create negative effects in local housing markets. For example, flippers may drive up prices in areas that are already experiencing a shortage of affordable housing, making it even more difficult for local residents to find suitable housing. Additionally, the rapid turnover of properties by flippers can create instability in local housing markets, making it difficult for homeowners to sell their properties or for renters to find stable housing.
In conclusion, the use of trade networks by flippers can enable them to reach beyond their local area and find properties that are undervalued or in need of renovation. However, the use of trade networks by flippers can also create negative effects in local housing markets, such as driving up prices and creating instability. It is important for policymakers to consider the impact of flippers on local housing markets and to develop strategies to promote stable and affordable housing for all residents.