Good news for flippers: Sales of new homes are down

Several years ago, there existed a bias among home buyers against existing homes in favor of new homes, but data suggests that this preference is shifting, with price being a large factor. For example, in 2005, a new home sold for $297,000 on average. Nine years later, that number had risen to $343,800, according to Realtytrac.

That increase of $46,000 in average new home price, combined with economic changes during the downturn, seem to be leading home buyers to existing homes—a real plus for investors who are flipping homes just like these.

Additionally, prices of existing homes actually declined by $11,300 from 2005-2014. In the current market, buying a new home could cost hundreds more per month, and possibly hundreds of thousands more over the course of 30-yr. mortgage.

All of this equates to good news for investors, who come in to close the gaps, providing newly rehabbed homes with many of the benefits of a new home (new fixtures, appliances, cabinets, etc.) at a much lower cost.