FLIPPING FLOPPED IN RECENT REAL ESTATE MARKET.

Byline: GREGORY J. WILCOX

We can now stamp R.I.P on the urban legend that flippers churning out quick profits helped drive the late, great residential real estate market boom.

Didn't happen.

That's the conclusion being reached after the San Juan Capistrano-based consumer Web site HomeSmartReports.com released an analysis of short-time owners -- the flippers -- who jumped into the market between 2003 and last year.

Not many, is the short answer.

The company culled public records relating to residential sales -- houses and condominiums -- and considered any property owned for six months or less to be flipped.

This term refers to buying a house or condo, making some repairs if needed, then selling it for a profit.

It seemed like a sound investment strategy during the early half of this decade as appreciation piled up in most markets at amazing rates.

Consider the numbers for Los Angeles County, one of the nation's biggest markets.

Last year flippers accounted for just 3.6 percent of all residential resales. They peaked at 4.4 percent in 2005 as the appreciation cycle wound down.

But in the previous years when prices were still climbing, they only accounted for 2.5 percent and 3.9 percent of all resales.

The statewide picture looked the same. Homes owned for six months or less accounted for 3.2 percent of all home resales in 2006, down from 4.2 percent in 2005 and 3.6 percent in 2004. In 2003 it was 2.4 percent.

And not all of these short-time owners were flippers either. Job transfers, losses and family situations also likely prompted some buyers to sell after a short time.

``I don't think it really got out of control,'' said Steve Morgan, HomeSmartReports senior vice president.

Today's market is characterized by sales counts well under the year-ago level, and prices are making much smaller moves than a year ago. And some of those moves are down.

It's taking longer to sell a home now, too.

``There's some news out there that people don't really want to hear,'' Morgan said. ``What's going on now is probably not the climate for a get-rich-quick scheme.''

The biggest percentage of flipping, 4.2 percent statewide, came in 2005.

And the highest percentage of any market, 6.5 percent, came in Yuba County.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., has a pretty good idea who created this urban legend.

The Media.

``A lot of the news media went out to try to find flippers and hold them up as a sign of weakness in the market,'' he said.

Kyser rode out the boom and bust of the late 1980s and this market cool down.

And the buzz during both indicated that different mind-sets were in play. Cut and run in the former and hang on, maybe for dear life, in the latter.

``The easiest way you can tell it's not that much of a role is when you went to receptions and cocktail parties you didn't hear people talking about it,'' he said of flipping.

``In the late 1980s and early 1990s that was a staple of cocktail party conversation.''

greg.wilcox(at)dailynews.com

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