The US investment market is currently a hive of activity as investors flock to snap up properties around the country. Florida real estate remains a firm favourite among them, and as a result, the Sunshine State dominates the investor market. For example, in Orlando, Jacksonville and Miami, investment purchases made up more than 25% of transactions.
Record investments in Q4 2021
According to a report by the property portal Redfin, Q4 last year saw a record number of real estate sales to investors. Between October and December, they bought around 80,000 properties, the equivalent of 18.4% of the market.
The figure ranks as the highest ever for the US investment market. Investors spent US$50 billion on residential real estate in the quarter.
Florida real estate firm favourite
The Redfin report also looks at metro areas in detail and lists the seven markets where investment purchases made up more than 25% of the total. The list includes three Florida metros, Jacksonville, Orlando and Miami.
Jacksonville highest increase
In this Florida metro, sales to investors accounted for 29.8% of the total in Q4 2021. The figure represents a 157% increase on the same period in 2020 and investor activity has more than doubled in 12 months. Investors were not deterred by price hikes either – real estate in Jacksonville has gone up by 22%.
Miami focus of investor activity
This metropolis has long been a preferred spot for real estate investors, but activity has intensified still further in the last year. According to Redfin, investors bought 27.5% of the total. Miami real estate has also seen big price upticks and values currently stand at 26.8% more than a year ago.
Orlando rises in popularity
The theme park capital of America also experienced significant investor activity in Q4 last year. Investor purchases accounted for 25.9% of all sales during the three months. In addition, Orlando has one of the busiest real estate sectors and properties spend an average of just eight days on the market.
Appeal of the US investment market
Although skyrocketing prices have put off many would-be homebuyers, investors have the opportunity to cash in. And literally since three-quarters of investment buys are all-cash purchases.
Investors have turned their attention to all price ranges too. Redfin found that 32% of investment sales were in the mid-price bracket, up from 34% a year earlier.
Buy-to-let potential stronger than ever
Rental rates have risen, almost in tandem with house prices in the US. Median prices reached US$1,927 in May this year, an increase of 16.4% in 12 months.
“Investors are chasing rising prices because rental payments are also skyrocketing,” said Sheharyar Bokhari, economist at Redfin. He pointed out that higher rentals incentivise buy-to-let investment in the US.