Investor home purchases plummet in Florida, other parts of the country
HOLLYWOOD, FLORIDA - OCTOBER 27: A For Sale sign is posted in front of a single family home on October 27, 2022 in Hollywood, Florida. The rate on the average 30-year fixed mortgage hit 7.08%, up from 6.94% the week prior, according to Freddie Mac. M
ORLANDO, Fla. - Record-low interest rates during the COVID-19 pandemic gave real estate investors the opportunity to buy up scores of homes. With interest rates rising once again, causing home values to fall as U.S. homebuyers hesitate to purchase homes — these same investors have pumped the brakes.
A new report shows real estate investors purchased 48.6% fewer homes in the first quarter of 2023 than they did a year earlier as declining rents and housing values continue to eat at investors' profits.
Some major U.S. cities — including some in Florida — saw investor home purchases plunge over 50%. The analysis says most of the cities that saw the steepest decline are in the Sun Belt.
Places like Orlando, Jacksonville, and Tampa all saw declines of over 50% with investor home purchases. Places like Atlanta, Charlotte, NC, and Phoenix saw a fall of over 60% in investor purchases.
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The Sun Belt states ascended in popularity among homebuyers during the pandemic which is why investors piled in, following suit.
According to the report, 30.7% of homes sold by investors in March sold at a loss in Phoenix, followed by Las Vegas at 28%, Jacksonville at 20.9%, Sacramento at 20.2%, and Charlotte, NC at 17.4%.
Here are some other Florida cities that saw a hefty decrease in home investor purchases:
- Fort Lauderdale (-46.9%)
- Miami (-44.9%)
- Tampa (-54.8%)
- Orlando (-54.7%)
- West Palm Beach (-28.8%)
The report also found that investors who are still in the market are gravitating toward more affordable properties such as starter homes with 1,400 or fewer square feet, up 37.2% from last year.
Nearly two in five homes bought by investors are starter homes which include condos.