Redfin research analysis Alina Ptaszynski asserts that although buying and selling a home within a year for a gain represents a miniscule percentage of total home sales, the activity and its trends serve as a critical proxy for broader market patterns.
Ptaszynski notes that flips are an important sentiment indicator, reflecting investors' bets that the market trajectory will come their way and reward their investment. She spotlights, as part of her full-on analysis of the risks, the rewards, and the outlook for flippers, the top 10 neighborhoods for return on flip investment right here. Meanwhile, she writes"
Even though home-flipping activity represents a small portion of overall sales, it can have an outsized impact on the market. In the years of easy credit and zero money down loans before the housing crash, buyers with varying degrees of real estate and investing experience snapped up homes with the hope of selling them for a profit just a few months later, sometimes without even making any updates. All of that activity played a role in over-inflating housing prices.