Investors Buy 25% of Homes in 3 Florida Metros

NEW YORK – Among the competitive real estate markets, it’s not just first-time homebuyers or sellers looking to downsize or expand. A good chunk of the competition is investors.

According to a report by Redfin, investors purchased approximately 80,000 homes across the country, totaling 18.4% of all homes purchased in the fourth quarter of 2021. This is a record high for investor purchases, with a total of $50 billion spent on investment properties during the quarter.

Many investors are cashing in as home prices continue to rise. Flipped homes are selling for more money than ever, and rentals are harder to come by, causing a significant increase in rental prices. Median rent prices have increased by 16.4% nationally year-over-year, landing at a median price of $1,927 per month.

While investors still tend to go after lower-priced homes, a record-high 32% of investor purchases were mid-priced homes in the fourth quarter compared to 24% a year earlier. About 75% of the total homes purchased by investors in the fourth quarter were all-cash deals.

Companies like Fundrise have been actively pursuing single-family rental communities in hot southern markets around Florida and South Carolina, allowing retail investors to gain exposure to this asset class as well. Most recently, the company’s interval fund, backed by Goldman Sachs, purchased an entire community of single-family homes in Central Florida.

With an influx of northern sellers flocking to warmer weather, plus many buyers getting priced out of the market due to skyrocketing home prices and increased interest rates, the demand for rentals remains on the rise.

Excerpted from the Florida Realtors Newsletter.

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