Homebuyers in today's market are likely to encounter a lot of fresh paint and spruced-up bathrooms.
That's because flipped houses, renovated and quickly resold for profit, make up a larger share of the Sacramento region's housing market than at any time in the past decade, including the height of the housing boom.
About one in 12 homes sold in Sacramento County last month was flipped, meaning it was bought and resold within a six-month period, according to real estate information service DataQuick.
"Flipping was up significantly from a year ago," said DataQuick analyst Andrew LePage.
In Sacramento County, flipped houses accounted for 8.1 percent of sales in September, up from 4.4 percent in September 2011, DataQuick said. In the Sacramento region including El Dorado, Placer, Sacramento and Yolo counties the rate nearly doubled from 3.3 percent in September 2011 to 6.5 percent in September 2012.
That's the highest percentage of the market since at least January 2003, when DataQuick started keeping track, and higher even than in 2004 and 2005, when the fast-expanding housing bubble made flipping the sport of speculators big and small.
Back then, a buyer could purchase a house on loose credit and resell it a short time later. With prices rising from week to week, there was easy money to be made, at least until the housing market came crashing down.
That put most casual flippers out of business, but the practice didn't die away. Professional flippers remained active during the bust, and lately, as the housing market has shown signs of recovery, they've picked up their pace.
RealtyTrac, an information service based in Irvine, says flipping rose by 43 percent statewide in the first six months of 2012 compared with the first six months of 2011. Of the approximately 100,000 homes flipped nationwide, more than a quarter, or about 26,000, were in California.
In the Sacramento region, 25 percent more houses were flipped in the first half of this year than in the first half of last year. More than 3,000 homes were bought and resold from January to June of 2012, RealtyTrac said, making Sacramento the seventh busiest flipping market in the nation.
Compared to the heady days of the boom, today's flippers are a more professional lot, said Daren Blomquist, RealtyTrac vice president.
"I do think we're dealing with a different breed of flipper in this market," he said.
The biggest hurdle to fly-by-night flippers, he said, is that the process requires a lot of cash.
"You have to pay cash at auction," Blomquist said, and need cash on hand for the renovation.
Tony Yuke, a Sacramento real estate agent, renovates two or three dozen homes a year with backing from investors.
He heads to the steps of the Sacramento County courthouse on many mornings to bid on foreclosures in places like Elk Grove and east Sacramento. The houses tend to be dated, and Yuke will put in granite counters and stainless-steel appliances, or replace shake roofs with composite shingles.
He tries to fix up the properties and resell them within 90 days of closing. Investors are looking for a 10 percent to 20 percent return on their money, he said.
That's a substantial short-term profit. But Yuke said the profit is high because the risks are, too. Homes can't be inspected before auction, and major problems such as termite damage aren't visible to the naked eye.
"That eats up profit margin very fast," he said.
Yuke insisted the benefits of flipping extend beyond quick profits for investors.
He said he's making fixed-up houses available to first-time buyers. At a time of tight inventory and multiple all-cash offers, the houses would otherwise be snapped up by landlords and become rentals, he said.
Flipped houses, renovated and professionally staged, often fetch top dollar and raise the values of homes around them, Yuke said.
"We're changing neighborhoods," he said.
Real estate agents said some buyers are annoyed with having to pay premium prices for homes that have little more than new paint and carpet.
"They resent people buying on the courthouse steps and trying to make a killing," said veteran Lyon Real Estate agent Annette Black.
Others are willing to pay more for turnkey homes, especially with mortgage rates near historic lows. They figure it's better to finance the purchase of a renovated house than pay cash for repairs later.
"With low interest rates, their buying power is a little stronger, and they would rather stretch a little bit and have it be done," said Dunnigan real estate agent Chris Balestreri.
What it often comes down to is how good a job the flipper did, experts said.
Ken Dyer, a contractor who renovates high-end homes, said flippers span a broad range.
There are quick flippers who put "lipstick" on homes with paint and other cosmetic touches but don't add much real value, he said.
There are mid-tier flippers who repair structural damage, upgrade kitchens and baths and make other substantial improvements.
Then there is the upper tier flippers like Dyer who buy dated houses and transform them into showpieces in the city's most expensive neighborhoods.
On Wednesday, he worked his cellphone, talking to investors to put together $400,000 cash for a home he was trying to buy near McKinley Park.
He also oversaw crews of subcontractors painters, plumbers and electricians who were renovating million-dollar homes in the Fabulous 40s and on an exclusive street in east Sacramento.
In the Fab 40s, his workers were rebuilding a one-story brick house at 41st and M streets. They had expanded the house from two to three bedrooms and added a bath. They had knocked out a wall, opening the kitchen to a sunroom and adjacent patio. And they had redone all the walkways and landscaping.
Dyer said he and his investors paid about $525,000 cash for the house and put nearly $250,000 into it. A woman moving from Carmel had already bought the house for close to $900,000, he said.
Dyer said his goal is to give older homes the spaces and amenities of modern houses without sacrificing their period charm.
"I'm a purist," Dyer said. "When I'm done I don't want anyone to know anything's been done to the house."