Harsh Reality of Home Flipping
Once upon a time, there was a group of folks known as home flippers. They bought houses that needed some TLC, fixed them up, then sold them for a profit. The real-estate equivalent of day traders, they mostly went extinct during the housing crash.
Except on television.
Please bear with me as I somehow try to weave the disparate threads of the real estate market, house flipping and gay marriage with data analysis and television ratings.
Let's start with a suspect headline. It read "43% of 2014 home buyers paid all cash." That would be a fascinating data point, if it were true. It probably isn't.
The data from RealtyTrac was a bit confusing, and perhaps we can excuse some of websites and radio stations that ran with it.
The confusion seems to arise from this week's Institutional Investor & Cash Sales Report, which showed that 42.7 percent of U.S. residential property sales in the first quarter were for cash. That was up from 19.1 percent in the same period one year ago, a large and suspect increase. The National Association of Realtors data, which is broader and tracks actual closings, puts all-cash purchases at 33 percent in March 2014, up a bit from the 30 percent a year earlier. There are different methodologies and data sets used by the two organizations.
About this time, the astute reader might be wondering what constitutes a house flip. From RealtyTrac, we learn that it refers to any property "where a home is purchased and subsequently sold again within six months."
As it turns out, this is only a very small percentage of single-family home sales -- 3.7 percent last quarter. That's down from 4.1 percent in the fourth quarter of 2013 and 6.5 percent in 2013's first quarter, according to RealtyTrac's 2014 first-quarter U.S. Home Flipping Report.
Flipping, apparently, isn't what it used to be.
Except on television, where flipping is huge, especially on the HGTV network. This year, it planned to add nine programs related to house-flipping. This is on top of a lineup already heavy with housing-related programs.
Those nine new series included shows with such unfortunate titles as ``The Jennie Garth Project,'' ``Property Brothers Big Reno Project,'' ``Flipping the Block,'' Fixer Upper,'' ``My Big Family Renovation,'' ``Genevieve's Renovation,'' ``Vacation House for Free,'' ``Sold on the Spot'' and ``Flip It Forward.''
That last one is where our tale takes a strange turn.
The stars of the show are two good young men from North Carolina who enjoy flipping real estate. They are twin brothers Jason and David Benham. As it turns out, their dad -- his name is (you can't make this stuff up) Flip -- runs an organization called "Operation Save America." That sounds like a good thing because, as any observer can tell you, we could use some saving around here.
Only the goodness probably is in the eye of the beholder. The folks at Slate labeled them "right-wing extremists," while the Los Angeles Times called the Benham boys "anti-gay-marriage Christian activists." A website, Right Wing Watch, reported that one of the brothers told a talk-show host that ``homosexuality and its agenda is attacking the nation."
The question is whether this worldview fits in with the gestalt of HGTV, a network that skews 65 percent female; 77 percent homeowners; 47 percent earning more than $75,000 a year; and above average education levels.
HGTV was never quite as "out" as the Bravo network, which more than a decade ago broke ground with ``Queer Eye for the Straight Guy.'' But the U.S. has changed since then. The HGTV network, according to the Los Angeles Times "regularly features same-sex couples on its signature series 'House Hunters' and 'House Hunters International' and LGBT contestants on the competition program 'HGTV Design Stars,' as well as "Ellen DeGeneres' Design Challenge." Today, very few bat an eye if a LGBT couple wants to buy a fixer-upper and flip it for profit.
Hence, the network decided that the show wasn't quite in tune with its viewers. So it wasn't so surprising that the network cancelled production of ``Flip it Forward,'' which was scheduled to debut in October. Even less surprising is that the twins become stars on Fox News.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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