10 Metro Areas Where Investors Are Taking Over the Market

In some U.S. cities, first-time buyers are struggling to compete with real estate investors, particularly those who are scooping up homes with all-cash offers. Some are flipping single-family homes, townhouses, and condos for a profit, while others are turning them into rental properties. 

Though the share of market investors has reached its highest level since 2015, according to Realtor.com, they’re affecting some markets more than others. Southern metropolitan areas are seeing the greatest investment surges where competition is already stiff and prices are already high.

“Investors are particularly attracted to affordably priced homes, the very homes that would normally be appealing to first-time buyers,” says Realtor.com Manager of Economic Research George Ratiu. “Investors who generally come with cash have a significant advantage over first-timers who typically rely on a mortgage. In a market with few homes for sale already, this prices out many buyers.

“Homeownership either gets pushed out of reach or delayed for a lot of Americans who can’t compete with investors even though otherwise they would be ready and qualified for it,” adds Ratiu.

While investors don’t make up a huge portion of the market, they’re growing—particularly in the Midwest and Sun Belt where home prices are still relatively affordable and rental prices are rising. Investors made up 5.5% of all home purchases in the first seven months of 2021.

“Prior to the Great Recession, a lot of investors were in the flipping business. Now you have more professional investors acquiring properties for possible rentals,” says Columbia University real estate professor Tomasz Piskorski. “This makes sense given the expected demand for suburban housing. Not every millennial can afford a down payment, not every millennial wants to be tied down.”

For a list of U.S. cities where investors are becoming key market players …

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