Back Flip: The Real Estate Market is Back, and so are the House Flippers
When it comes to buying and selling real estate, Georgetown’s Peter Souhleris has never been short on confidence.
An architect turned house flipper for the past 15 years, Souhleris says he continued to buy and sell throughout the real estate crash and kept making money.
Souhleris, who runs CityLight Homes out of Peabody with business partner David Seymour of Lynn and co-stars with Seymour in the reality show “Flipping Boston” on A&E, survived the downturn by following the same philosophy he used when things were booming a decade ago: take calculated risks, and always have an exit strategy.
So as home values were declining in 2007, Souhleris saw a growing number of short sales (selling a home for less than what’s owed on the mortagage) and foreclosures that might have lacked great resale value in the near future, but could exist as rental properties until the market bounced back.
“One thing that never took effect is [that] rents never went down,” Souhleris says. “We bought a bunch of multifamilies. Because many would-be homeowners were renting, the rental market sustained itself.”
Now, as the real estate market in general begins to rebound, Souhleris sees improvement, but like many, he is stepping lightly, rather than predicting an impending boom.
“There’s so much uncertainty in the world. It’s a global economy now,” he says. “I would not double down in this market. Time heals, but people forget how bad it was four years ago. It was so bad; I did so many short sales for people. They were losing fortunes.”
In spite of this, local real estate agents are feeling cautiously optimistic. The seasoned professionals have been through other downturns. They know that what goes down eventually comes up, and prices in the Merrimack Valley and across the state finally took a turn for the better the summer of 2013.
The most telling statistic might be the fact that 5,941 homes were sold in Massachusetts in July, the most in any one month since June 2006, according to The Warren Group. In addition, The Warren Group says the median price of a single-family home in the Bay State was up 10 percent in July 2013 over the same month a year earlier, paced by activity on the South Shore and close to Boston.
The flourishing spring and summer markets helped clear out inventory across the region, which in many cases left more buyers than homes for sale. In Amesbury, for instance, there were 75 new homes that came on the market during the first six months of the year, but 111 sales during that same period, clearing out,homes that had been on the market for some time. These numbers would have been reversed just a couple of years ago, according to real estate agent Cathy Toomey of Stone Ridge Properties.
And when demand starts to outpace supply, prices typically start to increase.
In the higher-priced markets such as Andover and North Andover, median prices have stabilized or started to increase recently. Buyers — from first-timers to purchasers of $800,000 homes — are out shopping for real estate. Christopher Doherty of Prudential Howe & Doherty Realtors notes that Andover’s median sales price increased from an average of $540,000 in 2012 to about $545,000 in the second quarter of 2013.
“In terms of consumer confidence and buyers being back out, it’s already occurred,” Doherty says. “The word caution is still out there, and the market we’re in now is still in a careful recovery. But by virtue of the fact that in the year over year numbers the median price has really maintained itself, to me that says there’s stability here.”
Flippers who are sniffing around for profits are another sign of growing consumer confidence.
“We’re definitely seeing them,” Toomey says. “It’s a confidence level. You don’t pick up properties and flip when you see a steady decline in values.”
Souhleris admits the market turn will bring out more competition for him and Seymour. But he has seen many a flipper fall on his or her face. He notes that the popularity of “Flipping Boston” is partly due to the enjoyment of watching the stress and chaos that ensues during the buying and selling process.
“Everything has a risk,” Souhleris says. “You need to be educated, and wait in line to get there. It isn’t about whether you can go in and hit it out of the park the first time. Sure you can, but that’s lucky. I prefer to have a system behind me.”
Flipping Careers
When Peter Souhleris graduated from college, he had dreams of working as an architect. But as that dream became a reality, he noticed that while he was coming up with great designs, the developers enlisting his help were reaping all the profits.
“I was watching [developers] come in with all this stuff and making all the money,” Souhleris says. “I said wait, I thought I had a passion for architecture, but I really have a passion for real estate. I love taking something ugly and making it look unbelievable.”
In a nutshell, that’s how Souhleris became a house flipper. He never imagined he’d become a reality show star along the way.
Souhleris and David Seymour, co-owners of CityLight Homes, are the stars of “Flipping Boston,” which typically airs Saturdays on A&E. Seymour saw the A&E ad that was seeking house flippers for a Boston-area based show, and he and Souhleris got it by beating out about 400 applicants.
Each episode focuses on a single house flip, specifically the successes and mishaps, as well as the fights. Souhleris is details oriented, while Seymour has a need for speed, a dynamic that makes for plenty of drama.
“Obviously the people casting the show saw a yin and yang with Dave and I,” Souhleris says. “It might seem like we want to kill each other on a daily basis.”
The true reality is that Souhleris and Seymour like each other. The cameras, Souhleris says, have a knack for catching the moments when he pushes Seymour’s buttons and just leaves, or catches Seymour in a particularly frustrating moment.
The key to their success, Souhleris says, is how they make homes inviting to buyers. They recently completed an episode in Newburyport in which they converted an 19th century schoolhouse.
“We give people bragging rights in their home,” Souhleris says. “If you’re walking in, we want you to brag about the wine and beverage cooler, or the fireplace or modern colors, or the kitchen or the lighting. When they walk out, they can’t wait to put in an offer.”
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