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.

The implications of this are challenging to contemplate. A pair of good-looking twin brothers, raised by an intolerant father, drift into a lifestyle of home renovation and decorating. HGTV’s mistake was trying to do this as a reality show. The trouble was that real life intruded.

 

Originally published here

Category: Real Estate, Really, really bad calls, Television

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “HGTV Won’t Flip My Big Gay House . . .”

  1. rd says:

    With hedge funds and private equity turning into big players in the single-family home market, we could very well have 30%-40% of home purchases as “all-cash” from the realtors standpoint. The big money doesn’t go to the local bank to get a mortgage, so the stats would show it as a cash purchase. What we don’t know is if the big money is using a big pool of borrowed money as well as investors’ cash to buy the houses, so the “all-cash” purchases may still incorporate a fair amount of leverage.

  2. Low Budget Dave says:

    Bloomberg articles really annoy me sometimes, by refusing to show the article in IE8, and demanding that I switch to FireFox or some other such non-standard browser. It is like visiting a French restaurant and being told I have to pay in Euros.

    Anyway, for people who carry around pocket Constitutions, I am surprised at how many people on right-wing misunderstand free speech. (It doesn’t mean you can’t be fired for being a biggot, it just means you can’t be arrested.)

    The 43% figure seems pretty high in places, and pretty low in others. I live about halfway between a rich community and a poor one. In the poor community, the cash sales are about 10%, usually to middle-income flippers. In the rich community, cash sales are about 95%, usually to (giant) real estate investment funds.

    The investment funds are fascinating to me. Some of the houses are rented out, of course, but others just sit there vacant. If these are being used as vacation homes, it is hard to tell. My theory is that they are being held as a hedge against inflation. Someone is wagering that the value will increase (or the dollar will decline) faster than the cost of real estate taxes and maintenance put together.

    Real estate taxes in our area run about 2%, and maintenance adds another 1% or so. Considering the opportunity cost, this is a pretty heavy bet on inflation.

  3. rj chicago says:

    “But the U.S. has changed since then.”

    The one thing that continues to amaze me is the meme that ‘change’ by its nature is a good thing as I think this quote implies.

    I lean to the conservative side of policy and ethics and yet here is another example brought forth AGAIN via this HGTV cancellation that for those (not you Barry) who preach tolerance – they are the least tolerant of the lot – and the folks that seem to be the ‘target’ for such intolerance are the very folk who proclaim Christianity as their leading light and faith. These acts are if not shameful – utterly repugnant and need to be called out for what they are – HATE! The hypocrisy is of epic proportion. Sad, sad, sad what our nation has devolved to, bullying one another to get one’s way. Pathetic!!

    Broad is the path to destruction, narrow is the gate to salvation and FEW will find it!

    • hankest says:

      Uh, RJ suppose a channel that catered to conservative middle america (Military Channel perhaps?) hired some people for a new show. Soon after, those people were shown saying “America is evil and is ruining the planet” then they burned a US flag. Perfectly their right under the constitution, but i suspect you wouldn’t be surprised nor upset that they get their show canceled.

      The twins show was not cancelled because they are christians, rather it was canceled because they shared some rather bizarre views about gay people, and ones that most of the HGTV audience no doubt find repugnent.

    • DeDude says:

      Very hateful to hate the haters. So if we want to ban and sanction those who hate haters (because of what they hate) should we also ban and sanction those who did the original hating (and are now being hated upon)?

      Personally I hate apple pie, but love blueberry pie. Should I be sanctioned for this discriminatory hate of one over another? Should I be forced to hate both or forced to hate none? Are there legitimate hate (like hating Hitler) and non-legitimate hate like hating black babies? If there isn’t should we all be forced to love Hitler, if there is – what are you whining about?

    • orko says:

      hankest has it right. And in 29 states across the US you can still be fired for sexual orientation but not religion. Calm down RJ, your comment reads as if it was dictated by Sarah Palin, shallow sanctimoniousness wrapped up in victimhood with a few exclamation points for good measure.

  4. VennData says:

    “…From RealtyTrac, we learn that it refers to any property “where a home is purchased and subsequently sold again within six months.”

    I have a show concept. Fast Flip. D…D…Dylan Ratigan and the boys can talk about flipping houses within weeks, hours even.

    Just get ready for the backlash of those viewers who will be so abused and used from High Frequency Flippers turning houses over every second.

  5. Moopheus says:

    In my neighborhood, there’s definitely been an uptick in flipping. But here, it is not so much single family homes as multi-family homes that get converted to condos, which is not mentioned in that realtytrac report (which is odd, since it looks at metro areas that presumably have condo markets). But I live in biotech mecca, and new labs have been springing up around here like mushrooms–very large mushrooms, which has been bringing in a lot of new buyers with money. And, as far as I can tell, it’s mainly professional developers doing the flipping, not the opportunist amateurs that populated HGTV during the Great Bubble. Whether that’s any better remains to be seen.

  6. milkman says:

    The funny thing is that the two anti gay homophobes are stars on fox now..wonder why?…go figure…telling us about the unfairness of it all….

  7. ashpelham2 says:

    Thank you for your comments about the browser and viewing experience, Low Budget Dave. IE is still the commonplace browser being used on desk top machines. And this story is a nice compliment to that thought: the masses are being forced to accept the ideas and habits of the few. And being told if we disagree with it, to get out of the yard. A yard which was first built and managed by the masses.

    America is a place of hate of the successful, and coddling of the slackers. Perhaps I just vote with my dollars: no bloomberg.com and no HGTV.

  8. barbacoa666 says:

    I purchase houses to rehab and rent out. It’s easier to make money in that business than in flipping, and the competition is so tight that even that business is difficult these days. Truthfully, most people making money from flipping are profiting from talking about it. Not from the flips.

  9. betheball says:

    Institutional investors are buying blocks of houses and trying to rent them out. From what I see they are not getting the money they expected in rent and managing 1000s of houses is becoming a logistical nightmare. Flippers are not making money like they did during the housing boom, its a total myth. There is way too much competition out there for the same small and getting smaller inventory of deals.

  10. lucas says:

    I would love to buy a family home in my community. I have been looking for years. I cannot outbid the people who buy to rehab and rent. These guys are willing to pay more to acquire the house and pay less to fix it up because it is “just” a rental. The cost comes mostly out of the tenant’s pockets. There is no way a “home” buyer can pay the extra acquisition cost, pay retail to fix it up properly and avoid paying more than the house will be worth when the rehab is complete, especially since the cost comes solely out of the buyer’s pocket without back-up leverage on other properties.

    A lot of the rehabbers that show up at auctions represent hedge funds. They look like goons and they do not even have to show the auctioneer their money like the rest of us do. Then these goons show up at the newly purchased property with title in hand and a truck, and physically move the occupants, saving themselves the time and cost of a legal eviction. I have seen it in my neighborhood many times.

    Sometimes, these rehabbers put the house up for sale, where a homebuyer will end up paying top dollar for someone else’s design choices, because these rehabbers look to make at least 20% profit, donchaknow. So the buyer ends up paying again to have that ugly orange and white checkerboard tile torn out of the kitchen and bathroom (rehabber got a great deal and put it in all his properties), and replaced.

    Another report said that 20 million people could afford to buy but choose not to. I dispute the figure, but I wonder how many those who could afford to buy are either priced out by rehabbers, or act the greater fool by paying the premium price.

  11. CD4P says:

    As an avid viewer of “House Hunters International”, a rated “G” show, I was surprised recently when the episode “Pet Peeves in Belize” aired, in the preview at the start, “Heather” lifting up her skirt and displaying her underwear. What?! Did I just get flashed?!? So, like a sucker, I watched the rest of the show, only to discover the “flash” clipped out. Is there no ‘honor’ in reality TV??!

  12. CPI says:

    BLUF: I’m in the business and we fund about 12 flips a year. Deals are getting harder to find and our clients are telling me that they are having a tough time finding new deals (competition from “beginners” and “amateurs” possible lured by these bullshit “flipping” seminars) and making a decent profit on their existing deals. I do not have any numbers for the area I do business (Southeast VA) but there is a fairly steady stream of deals that we fund…

    I started a small business in 2010 with a partner who used to work for a larger local company in the flipping business. My involvement is the hard money lending side (I act as the bank) and my partner seeks out new deals, and monitors weekly construction draws. We average about 12 deals a year, all six month loans with 10% (annual) interest and eight points and never, ever loan above 65% LTV (post construction / rehab and based on third party appraisal). We cater to customers that would never have access to “normal” lending and have had only one deal foreclose. I used to invest exclusively in the market, but decided that with this model, when things go south, I still have first deed of trust on the house. I like the business because from my limited three-year experience; we make money, the flipper makes money, the real estate agent makes money, the closing attorney makes money, the title and insurance companies make money, and a crappy house has been brought back to life and sold to a low to middle income tax payer – at an affordable price. A win across the board.

  13. Alex says:

    Is it just my imagination, or has TBP started attracting more of these cranky, poorly informed comments than in the past?

    First of all, the problem with IE8 and Bloomberg isn’t a Bloomberg problem, it is an IE8 problem. Here is a short description of it from Microsoft, along with some recommendations of what to do with it: http://support.microsoft.com/kb/967897

    For a more detailed description, google around and it will be easy to find one, Microsoft isn’t really forthcoming about describing their screwups – in fairness, they have a lot of company in that department. But Microsoft made it part of their business model to use nonstandard html, so that only their browser would work on certain web pages. It isn’t all that surprising that it would come back to haunt them now.

    By way of comparison, validator.w3.org retuned 50 errors for the bloomberg home page and 52 for the msn home page. Bloomberg is far from perfect, but they are not the problem.

    Second, anyone who thinks Firefox is “non-standard” or used by “the few” is registering a level of denial on a par with the anti-climate change camp. You may like IE8, but it is no more than a quarter of the market, and yes I know there are firms that still insist it is much more than that, but they keep changing the way they count.

    Follow the link I posted, and you will see how to put IE8 in IE6 compatibility mode, and you can read Bloomberg.

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