Real-estate investors shook up a mid-pandemic homebuying boom by going toe to toe with first-time buyers and cutting down the competition with all-cash offers, but in a market correction, many are now pulling back. Mortgage rates are soaring, rental prices are beginning to fall, and waning buyer demand is forcing investors to reconsider their target metros.
In pricey markets like Seattle, skyrocketing housing prices are causing a slowdown in renter and buyer activity, and as a result, investment properties account for roughly 1 in 30 mortgages in the metro area, compared to 1 in 20 about a year ago, Realtor.com reports.
Rising home values of the past several years pushed many of these investor buyers out of the premier, coastal real estate markets and into smaller cities, says Matthew Gardner, the chief economist for Seattle-based Windermere Real Estate. They include places like Boise, ID, where home prices were traditionally more affordable than urban hubs such as New York City, Boston, Chicago, and San Francisco.
Advertisement
Related Stories
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Affordability
The Disappearing Act That Is Middle-Income Housing
An expert weighs in on the diminishing supply of middle-income housing, which is particularly acute in California, and what to do about it
Market Data + Trends
A Look at Homeownership Rates Across the Nation
Data for homeownership rates in the 100 largest US cities show Port St. Lucie, Fla., in the top spot, while West Virginia is the state with the most homeowners