Are these Flippers smoking "Hopium"?

[Ralph Stowe]

I've been browsing the local MLS just to see which areas are trending, etc. More and more I'm finding rehabbed homes listed for WAYYYY beyond what the average sale price for the area is. Example, there is a run down house, a 4 bed 1 bath, 1500 sq. ft. that could definitely use some TLC (new floors, paint, granite counters, etc..) they are asking $65k for it, as is. Well rehabbed homes in that same area have been selling in the $120k's (ie. officially "SOLD)". But less than a block away in either direction, there are some rehabs (one 3 bed 3 bath around 1400 sq. ft.) they are asking $223k and another 4 bed 2 bath 1800 sq. ft. for $275k. So either the house they are asking $65k for is the deal of the year... OR 2 house flippers are REALLY overestimating for the area and stand to lose a ton of money. Are they OK having to reduce their asking price every few weeks given holding costs? Are they just shooting for the moon and being way too optimistic? Are they trying to spearhead creating the next "Up-and-coming" neighborhood? Or did they just make a rookie mistake and overbuild for the area?

[Greg Parker]

Sounds like they have been watching too much HGTV and have spent way too much money.