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.
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