The bust in the housing market originates from the subprime loan crisis in 2007 -- a crisis that turned into a worldwide financial catastrophe. The subprime crisis is often blamed on those individuals who purchased homes despite their inability to sustain monthly mortgage payments. However, the real culprit in the crisis may be house flippers who aided artificially inflating home prices, which eventually hurt subprime borrowers; that is, subprime borrowers were, conceivably, lured into purchasing an unaffordable home because they paid an inflated price.Despite the role that home flippers may have played in the housing market meltdown, the quick-flip mindset has been on the rise again -- especially on high-end homes valued at more than $750,000.
NEW YORK ( TheStreet) -- The mortgage market is starting to see a resurgence in home "flips" - residential properties that are bought and sold within a six-month period with the intent to make a big profit on short-term turnaround. Home-flippers thrived in the 1990s and the first half of the 2000s as home prices rose significantly thanks to a booming economy, a roaring housing market and an easy-money mortgage lending environment. But the Great Recession and the subsequent housing collapse put a stop to that. With home prices sliding in 2007 and 2008, the flippers were caught in a bind, many of them left holding the mortgage to multiple properties just as housing prices plummeted. That's why so many home foreclosures over the past five years were due not to bread-and-butter homeowners, but to home-flippers. In fact, some industry experts blame the housing market crisis on home-flippers and not on big banks, loose lenders or in-over-their-head long-term homeowners. The Role of House Flippers In a Boom and Bust Real Estate Market: