In No. 2 Jacksonville, they dropped 48.2% in 3Q and over 40% in 3 Fla. metros, but W. Palm Beach saw only a 7.6% drop, Miami was down 14% and Fort Lauderdale, down 19.1%.
SEATTLE – The current real estate market isn’t as appealing to investors. Purchases of U.S. homes dropped 29.7% year over year in the third quarter (3Q), according to a report from Redfin. They bought 48,667 homes – the lowest level of any third quarter since 2016.
By comparison, overall home purchases fell less – 22.2% to 305,219 – the lowest third-quarter level since 2012.
In the six Florida metros included in the study, results were mixed. In Miami and Fort Lauderdale, investors continued to buy homes, albeit at a slightly lower rate than one year earlier. In four other metros, however, the decline in investor activity was greater than 40%.
Florida metro investor purchases
- Fort Lauderdale: Down 19.1%, with 19.5% of all sales purchased by investors
- Jacksonville: Down 48.2%; 19.5% of all sales by investors
- Miami: Down 14.0%; 30.5% of all sales by investors
- Orlando: Down 42.6%; 19.1% of all sales by investors
- Tampa: Down 41.3%; 17.9% of all sales by investors
- West Palm Beach: Down 7.6%; 17.1% of all sales by investors
Of all U.S. cities to see a drop in investor activity, three of those Florida cities were in the top seven list:
- Atlanta: Down 49.7%
- Charlotte, NC: Down 49.6%
- Jacksonville: 48.2%)
- Phoenix: Down 47.4%
- Las Vegas: Down 43.3%
- Orlando: Down 42.6%
- Tampa: Down 41.3%
“If I get any investor clients these days, it’s usually the mom-and-pop ones,” says Redfin Premier real estate agent Heather Mahmood-Corley in Phoenix. “The bigger investors who used to come in and buy five or 10 homes at a time – you just don’t see that anymore. The money they were getting from hedge funds has dried up, rents are down and demand for housing in general has slowed because so many people are staying put.”
Investors piled into the Sun Belt during the pandemic to profit off surging housing and rental values as scores of remote workers moved in. However, that rapid rise has made the recent decline seem dramatic. Appetite for homes in many Sun Belt metros has also cooled because many buyers have been priced out of the market.
“We don’t expect investors to dive back into the market in a big way anytime soon,” says Redfin Senior Economist Sheharyar Bokhari. “Borrowing costs are unlikely to fall significantly in the near future, and while home prices may soften a bit, they probably won’t cool enough to bring back a critical mass of investors.”
© 2023 Florida Realtors®
Go to Source
Author: marlam