House flipping activity increased for the first time in three years in 2016, as flips accounted for 6.1 percent of all home sales.
Trulia reports that Las Vegas led the nation in house flipping last year, increasing to 10.5 percent from 9.6 percent the year before. Detroit, Chicago, and Knoxville, Tenn., had the largest increases last year, rising 4.8, 2.8, and 2.7 percentage points, in terms of shares of total home sales, from 2015.
Why is flipping activity picking up again? While it’s tough to single out one particular cause, rapidly rising home prices have likely played a major role. Home price gains in 2016 were the most since 2006, and prices in many markets are now back to their pre-recession peaks. In general, flipping homes requires at least some growth in prices in order to entice investors to pick up their game.