One of the characteristics of perfect competition is free entry. If firms make an above average rate of return, new firms will enter. This increase in supply will lower price and the rate of return starts to fall. This might be happening in house flipping.
See Why It’s a Tough Time for House-Flippers by Lori Ioannou of The WSJ. Excerpt:
"Heightening the problems, “there is increasing competition from institutional and foreign buyers, and it’s becoming harder to find good deals,” says Anthony Youngs, a real-estate consultant and house flipper in Marietta, Ga., who helps investors find properties to flip."
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