Bad Lesson For Real Estate Flippers

Investing in real estate looked so sexy. Like the tech-stock bubble that turned college kids and housewives into day traders, the real estate boom turned insurance brokers, doctors and bicycle mechanics into real estate flippers, who would buy and then quickly sell homes for easy profits.

Now those profits are shrinking fast. Nearly one in five flippers who sold from April to June actually lost money on the deal, the highest level in 2½ years, according to HomeSmartReports.com, which has released a report on flipping activity in 147 metro areas.

The vanishing act of speculators is accelerating the decline in home sales this year.  That's making life hard for home sellers but giving buyers a bonanza of choices.  It's also a stark reminder of the cyclical nature of real estate.

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