Redfin Reports Investor Purchases of Condos Fall to Lowest Level in 10 Years, Aside From Start of Pandemic
Overall investor purchases are increasing slightly, but investors are backing away from condos as it becomes harder to make money by renting them out—especially in Florida
SEATTLE, May 28, 2025--(BUSINESS WIRE)--(NASDAQ: RDFN) —U.S. real estate investors purchased 46,726 homes in the first quarter, up 2% year over year. That's according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Investor purchases have been relatively stable for the last year, increasing or decreasing by 4% or less each quarter.
This puts an end to the wild pandemic-era swings in investor purchases, with purchases increasing by up to 145% year over year in the middle of 2021 and falling by as much as 47% at the start of 2023.
In terms of raw numbers, investor purchases are back to roughly pre-pandemic levels.
Investor purchases soared at the start of the pandemic, with real estate flippers and landlords rushing to take advantage of ultra-low mortgage rates and the moving frenzy, then plummeted in 2022 and 2023 as rates increased and people stopped moving. Now, investors are more level-headed, purchasing homes when they believe it will provide a good financial return but holding off when there's more risk.
"Investor home purchases have leveled off because rapid sale-price and rent growth is no longer the norm," said Redfin Senior Economist Sheharyar Bokhari. "While some investors are still making money by flipping homes or renting them out, particularly in parts of the U.S. where rents are still rising, many of the investors who jumped into the market in 2021 or 2022 have backed off. That's one piece of good news for regular homebuyers: While it's still hard for the average American to afford a home, there are now more homes to choose from and individuals aren't facing stiff competition from investors. That allows buyers the chance to negotiate prices down, and/or ask the seller for concessions."
Investors netted a median of $182,980 in capital gains for each home they sold in March, up 2.8% from a year earlier. Just 6% of homes sold by investors were sold at a loss, up only marginally from 5% a year earlier.
Investor listings are making up a slightly smaller share of overall listings than last year. Less than one in 10 (8.4%) total U.S. home listings was from an investor in March, down from 8.9% a year earlier and the lowest share in nearly two years. Investors are selling fewer homes now mainly because their buying activity plummeted in 2023.
Investor Purchases of Condos Decline 3% Year Over Year to Lowest Level Since Onset of Pandemic
While overall purchases are holding steady, investors are backing off of condos. Investors purchased 8,509 condos in the first quarter, down 3% year over year to the lowest level in 10 years (except Q2 2020, when the start of the pandemic nearly ground the housing market to a halt).
Investors are buying fewer condos because the condo market is slowing faster than the overall housing market, with buyers concerned condos will lose value. A recent Redfin analysis found that nearly seven in 10 (68%) U.S. condos sold below list price at the start of 2025, the lowest share in five years.
Florida's stagnant condo market is one reason investor purchases of condos are down nationwide. Florida condos are struggling largely because HOA fees are surging and insurance costs are rising amid the increase in climate-driven natural disasters. Additionally, many of Florida's condo buildings are oceanfront, making them particularly vulnerable to climate disasters.
Redfin agents in other parts of the country, including California and Washington, D.C., say their condo markets are weakening because HOA fees are going up, and because it's difficult to rent out condos in today's market.
"People who own condos as rentals are trying to offload them because the money no longer makes sense. And people aren't buying condos to rent them out anymore unless they have cash to burn," said Stuart Naranch, a Redfin Premier agent in Washington, D.C. "It's a tough time to rent out a condo because high mortgage rates make it hard to profit on a financed condo, and outside forces like homeowners' association rental regulations and potential rental caps are adding to the hassle of being a landlord. The flip side is that people who are buying a condo as a home rather than an investment may get a deal because there are a lot of them on the market, without much competition."
Investors Pulling Back Fastest From Florida, Continuing a Yearslong Trend
Florida is home to three of the five metro areas where investor purchases declined most in the first quarter. Investor purchases fell 19% year over year in Miami, more than any other metro in Redfin's analysis. Next come Orlando, FL (-13%), Warren, MI (-13%), Columbus, OH (-13%), and Fort Lauderdale, FL (-12%).
Investors still have a higher market share in Miami than any other metro, with investors buying 30% of all Miami homes in the first quarter. But that's down from a seven-year peak of 35% at the end of 2022, and the lowest share of any first quarter since 2021.
Investors have been backing off from Florida real estate for years. Investor purchases of homes in Miami, Orlando and Fort Lauderdale have dropped on a year-over-year basis every quarter since midway through 2022.
In Florida, buying a home to rent it out or flip it is not nearly as appealing as it once was because the state's home prices are dropping, inventory is high, and HOA fees and insurance costs are soaring amid the increasing frequency of natural disasters. As stated above, some of the decline in investor purchases in Florida is due to the dwindling popularity of condos.
Investors Are Buying Roughly 1 in 5 U.S. Homes
Investor market share is holding steady. Real estate investors purchased 19% of U.S. homes that sold in the first quarter, unchanged from a year earlier and up just slightly from 18% two years earlier.
Investor market share has been fairly stable for the last several years because investor activity has aligned with that of individual homebuyers. When individual homebuying demand is down, investors are less likely to purchase homes because they're less likely to be able to sell it for a profit. Additionally, today's high interest rates discourage both individuals and investors from purchasing homes.
Investors Are Buying More Single-Family Homes
While investors are buying fewer condos, they're buying slightly more of every other property type.
Investor purchases of single-family homes rose 3% year over year in the first quarter. Purchases of townhouses and multi-family properties were each up 1% year over year.
When it comes to market share, investors bought roughly one-third (34%) of multi-family properties that sold in the first quarter. Investors bought 19% of single-family homes, townhouses and condos that sold.
Investor Purchases of High-Priced Homes Are Rising, While Purchases of Low-Priced Homes Are Falling
Investor purchases of high-priced homes nationwide rose 12% year over year in the first quarter, the biggest increase in three years, while purchases of mid-priced homes rose 2%.
Meanwhile, investor purchases of low-priced homes fell 4% year over year.
Still, low-priced homes made up nearly half (46%) of investor purchases in the first quarter, while high-priced homes made up 30% and mid-priced homes made up 24%.
Investors also have a higher market share of low-priced homes than higher-priced homes. Investors bought 26% of all low-priced homes that sold in the first quarter, while they bought 18% of high-priced homes and 14% of mid-priced homes.
To view the full report, including methodology and a full metro-level summary please visit:https://www.redfin.com/news/investor-home-purchases-q1-2025
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.8 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin's subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250528922156/en/
Contacts
Contact RedfinRedfin Journalist Services:Kenneth Applewhaite, 206-414-8880press@redfin.com
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