High rate of house-flipping indicates strong market in DC

Although people buy homes for many reasons, investment is always part of the equation. Even if a buyer plans on spending his or her entire life in a house, picking a residence that appears to be increasing in value is vital. No one can be sure when they will need to sell a house or move to a new area, so finding homes that can be easily - and fruitfully - resold should be a major concern.

Although it is a difficult thing to measure, increasing property value is a sign of a healthy housing market in a given region. By many metrics, the value of homes in the District appears to be on the upswing, which is good for anyone who owns - or is thinking of purchasing - real estate in Washington, DC.

One useful way of gauging the direction of property values is by looking at the flip-for-resale market. A large number of individuals or companies buying properties with the intent of quickly reselling them is typically indicative of a region with high consumer optimism and rising demand. In the District, this practice is in full swing for perhaps the first time since the recession. On a recent list of the 10 best cities in which to flip a house compiled by 24/7 Wall St., DC came in at number four, and shows no signs of slowing.

By most measures, the District is an ideal place to buy a house with the intention of reselling it. The average gross profit - the difference between what an investor paid and received for a property - was $72,297 for the first six months of 2012, according to the source. This high return on investment is not the result of a small sample size, though - the District recorded nearly 2,000 flipped-property sales during that period.

Of course, the ultimate sale price is not the only useful metric by which to measure the strength of the flipping market. If it takes many months - or even years - to resell a property, the investment of time, energy and money might not be worth it. Luckily, the average number of days it takes a home-flipper to sell a property in the District during the first half of 2012 was 110, well below the rate of many metros.

Moreover, the median asking price for homes in the District has been steadily rising over the last several months, which is a good sign for people thinking about buying a house - either with the intent of flipping it or not. According to the Department of Numbers, the median asking price stood at $339,000 as of October 8 - nearly 2 percent higher than it did a month ago, and a whopping 13 percent higher than it was last year.