Hard times have hit the apartment-flipping market — but speculators are still making a mint.
New York’s real-estate game is so hot that condo investors are still seeing massive profits on apartment flipping, even though rate of return in 2015 dropped by half from the year before.
According to Crain’s New York Business, the average quick-turnaround deal netted a 30 percent profit two years ago. But in 2015 it was only 15 percent.
Although the news was greeted with alarm by Gotham real-estate professionals, it was still more than double the rate of return of other investments, such as the stock market, which had a 6 percent return in 2015.
Some feared it could get even worse for flippers.
“The days of double-digit profits from apartment flipping are over,” Compass president Leonard Steinberg told The Post on Sunday.
“You can still make a profit flipping apartments, but you have to be very careful in what you choose. It’s like picking a stock.”
Part of the reason for the sluggish increase in turnaround prices is a glut of high-end-units now on the market, according to Crain’s.
Real-estate analysts also said increasing construction costs are making it harder for flippers to get that early bargain deal.
The new market is now forcing flippers to take a longer look at their investments and make them be more patient for a big deal.
“A rapidly rising real-estate market makes a lot of early buyers look incredibly savvy as they flip their apartments for big profits.” Pamela Liebman, president and CEO of The Corcoran Group, told The Post on Sunday.
“But as overall appreciation slows down and developers carefully time inventory releases and pricing changes, what once looked like easy money may now turn those flippers into long-term holders.”
Current market conditions are not leading to many fast flips.
“Not every market cycle is conducive to flipping,” Liebman said. “In a rapidly rising market, early buyers benefited because by the time they close, their proposed price looks extraordinarily low. But times changed.”
There was a time in the booming 1980s, at the height of the flipping craze, when everyone — even family and friends of real-estate brokers — looked to get into the act.
Even one high-end apartment flip could be enough to set up an investor for life.
“In the ’80s, this was everybody’s retirement plan,” real estate appraiser Jonathan Miller told Crain’s.
Additional reporting by David K. Li