TAMPA, Fla. (WFLA) — The number of investors buying homes is on the rise. Redfin, a national real estate brokerage, reports a high level of purchases are being made by investors over families nationwide.
Housing inventory and investor purchases are tied to how residents and businesses look at real estate. At a time when the housing inventory is distressed, institutional investors buying up homes in bigger numbers is problematic for homebuyers. For a family, a house is a shelter. For a company, it’s a commodity, it’s equity.
Nationally, about 18% of all fourth-quarter homes sold were bought by investors. Of the seven Florida metros surveyed by Redfin, only one area had fewer investor purchases than the national average.
In Tampa, 24.2% of the fourth quarter home purchases were bought by investors, while a whopping 29.8% were bought by investors in Jacksonville. Miami had 27.5% homes bought by investors, like banks or equity firms, and Orlando had 25.9%.
The Redfin survey shows the yearly increase data for how much investors were hunting homes in the Sunshine State.
| Market/Metro | % Investor Purchase | % Increase Y/Y |
|---|---|---|
| Fort Lauderdale | 21% | 44.1% |
| Jacksonville | 29.8% | 157% |
| Miami | 27.5% | 56.4% |
| Orlando | 25.9% | 70.9% |
| Tampa | 24.2% | 52.3% |
| West Palm Beach | 16.1% | 12.2% |
While the biggest prices aren’t in Florida for a new home to buy, the largest increase in investor home purchases year-over-year was in Jacksonville, where a third of all house buying was done by investors, and the proportion had increased 157% compared to the year before, the largest increase in the nation, according to Redfin’s data.
At the same time, the Tampa area housing competition remains high. Redfin reports the two most competitive housing locations in the Tampa Bay area from December were Cheval and Progress Village. Both cities had their homes staying on market for under a week, with a competitive score of 90, according to Redfin’s ranking system.
Cheval:
- 101.1% average sale to list ratio
- Median of 6 days on market
- 54.4% of homes sold above list price
- Population: about 11,000 residents (according to Redfin)
- Compete Score: 90
Progress Village:
- 101.5% average sale to list ratio
- Median of 5 days on market
- 59.3% of homes sold above list price
- Population: about 10,000 residents (according to Redfin)
- Compete Score: 90
By comparison, Tampa’s stats were a bit less competitive.
- 99.7% average sale to list ratio
- Median of 10 days on market
- 39.1% of homes sold above list price
- Population: about 388,000 residents (according to Redfin)
- Compete Score: 80
In nearby St. Petersburg, the numbers are closer to Tampa.
- 99.4% average sale to list ratio
- Median of 10 days on market
- 33.8% of homes sold above list price
- Population: 261,000 residents (according to Redfin)
- Compete Score: 80
Higher prices mean the value of real estate in the U.S. is up. Zillow’s research team said the U.S. market total value for homes grew $6.9 trillion, to a total of $43.4 trillion in 2021. The company said that was double the level of 10 years ago when the market recovered from the 2007 to 2009 housing crash during the Great Recession.
“The market value hit the $40 trillion mark in June, and since has been gaining an average of more than half a trillion dollars per month,” Zillow reported. “These enormous gains are the result of a record-setting year for home value growth both nationally and in many local markets.”
According to Zillow, Florida represents a big chunk of the real estate value in the country, making up 6.4% of the national real estate value and adding 8.3% of the year’s overall growth. Zillow said that means Florida accounted for $2.76 trillion of the national real estate value, over-indexed by 30.9%.
Meanwhile, Redfin‘s research showed that if you’re moving to Florida from out of state, you’re going to pay more to buy a home, in addition to high moving costs just to leave your current residence.
For Tampa homebuyers, from out of state or local, the median sale price for a house was $339,000 according to Redfin, but the budgets were more than $100,000 higher for outsiders. Buyers moving from outside of Florida reportedly had to budget about $575,400 while locals only needed about $527,000, according to the study.
Aside from Tampa and Orlando, data from Realtor.com’s national housing forecast reported the whole state of Florida is seeing price growth outpace sales growth as available inventory remains low. At the same time, more people are moving to Florida. Officials estimate about 850 people will move to the Sunshine State every day for the next five years.