In hindsight, all the signs were there in 2006. House-flipping reality shows were all over TV. Thousands of amateur home-flippers were getting in on the trend - many turning over multiple properties at once, using mortgages they never should have received.
So when the housing bubble popped in 2007, people who had bet big - buying second-rate homes hoping to renovate them quickly, then sell for a profit - were among those who lost the most.
Now, 10 years since the housing crisis triggered one of the worst U.S. economic downturns, the number of people flipping homes has returned to prerecession levels. Nationwide, more than 51,000 homes were flipped in the second quarter of 2016 - the largest number since 2010. In the Philadelphia region, the gains were even higher, reaching levels not seen since 2006.
Which raises questions. If house-flipping - now considered by federal researchers to be a primary cause of the Great Recession - is back in vogue, could this be a sign of another crisis in the making? And what could that mean for the Philadelphia area, considered one of the hottest and most profitable flipping markets in the nation?
"We're starting to see some very early signs in certain markets that flipping is reaching some of those same milestones we saw 10 years ago," said Daren Blomquist, senior vice president of Attom Data Solutions, which tracks real estate nationwide. "It's certainly a concern that too much flipping could overheat some of these markets.
"But," Blomquist continued, "I would not say we are quite there yet."
Where Flipping Is Happening
The map below shows local zip codes in which the sales of flipped properties were the highest proportion of all transactions. Click on the map for more information.
At first glance, it might seem as if a new bubble lies ahead. Flipping is big again, credit conditions have loosened, and home prices have been rapidly climbing while wages have not kept pace. But that alone, observers say, is not enough for concern - at least not yet.
Compared with the early 2000s, when people jumped in expecting prices to rise simply because the market was hot, flipping today is driven by concrete factors: older housing stock, limited new construction, and a low inventory of homes for sale.
That combination has meant a natural rise in home prices compared with a decade ago, when flipping itself rapidly boosted values, artificially inflating the prices of houses nearby.
As a result, local flippers compete to convert older houses into updated, attractive units. And with still-stringent lending requirements - flippers have been turning to cash, hard-money lenders and crowdfunding companies rather than banks, as they did a decade ago - the financial side of flipping has become less precarious.
With at least half of the housing in Philadelphia estimated to be more than 60 years old, and many parts of the city still plagued by decline, this region offers flippers an ideal scenario, observers say: the opportunity to buy cheap, renovate fast, and sell for much more as a neighborhood gentrifies.
As a business model, it's working. According to Attom, the Philadelphia metro area - which it defines as parts of Pennsylvania, New Jersey, Delaware, and Maryland - saw 1,344 flips in 2016's third quarter, a 6.2 percent share of total sales.
And area flippers scored some of the highest profits. In that same period, the most recent with data available, they earned a nearly 115 percent average gross return on their investments - the fourth highest nationwide.
Concentrated in neighborhoods ripe for flipping because of foreclosure, poverty, or underpriced properties in gentrifying areas, local activity has largely been focused outside Center City.
The most profitable market: Fishtown and Kensington, according to an Inquirer analysis of Attom data that excluded zip codes with nine flips or fewer during third quarter 2016. Recording 18 flips in that July-September period - 10 percent of all sales in the metro market - flippers there walked away with an average gross profit of $159,950, excluding refurbishing costs, the data show.
"We've had some explosive growth in these neighborhoods," said Chris Somers, a flipper and owner of Re/Max Access in Northern Liberties. "If someone has the opportunity to get attractive property there . . . it certainly can be high-margin opportunities."
Kelly Straka knows those opportunities well. Since the late 2000s, the 32-year-old real estate investor has been flipping houses in Kensington, Fishtown, and Northern Liberties.
It started off with an eye for design: As the market was reeling and homes weren't moving, Straka was hired by flippers and sellers to stage properties to boost their appeal. But eventually, that morphed.
"People were hiring me to rip out things that developers had just installed . . . they weren't happy with how everything was so cookie-cutter," Straka said. "Everything kind of snowballed from there."
Combining her design background and a penchant for flipping, Straka's projects are no small undertaking: "I'm gutting and changing the layouts and bringing [the homes] down to the studs, while also trying to save some of the character."
"I do a lot of exposed brick, exposed beams . . . tiles, different light fixtures," she said. "People look at me and say, 'You're crazy, how much did you spend on this stuff?'
"But each one is different, and that's what keeps it fun for me. And it's cool for the buyer because it's different than anything else."
Taking risks has brought big rewards, Straka said: By 2018, she will have completed 12 projects, each of which has shown a profit of between $30,000 and $100,000.
"You're hearing so much about Fishtown and places like that, but you can still buy for $100,000 or $150,000," she said.
Indeed, Attom found, in the third quarter, the Philadelphia region offered flippers the fifth-cheapest U.S. market to buy - with North Philadelphia, Strawberry Mansion, and West Philadelphia-Mill Creek-Dunlap topping the list as the cheapest neighborhoods, according to the Inquirer analysis.
Still, Willingboro, in Burlington County, proved to be the hottest market of all, Attom's third-quarter data show. Twelve flips were recorded there - nearly 29 percent of sales in the township.